Learn More and Comment on Proposed DOL Overtime Rule

The U.S. Department of Labor (DOL) recently released new proposed regulations on the salary threshold under the Fair Labor Standards Act (FLSA). The proposed regulations would increase the salary threshold for overtime pay by nearly 55% over the current level to $55,068 per year. The salary threshold in the final regulations may be even higher than the level in the proposed regulations – possibly as high as $60,209 per year. Were this proposal to take effect, most employees earning less than the new salary threshold would be entitled to overtime compensation when they work more than 40 hours in a workweek regardless of whether they are classified as executive, administrative, or professional (white-collar) workers.

The Center anticipates that this change would affect thousands of North Carolina nonprofits. We are offering two (free) ways to learn more about the proposed rule:

1. Read our analysis of the proposed regulations and their potential impact on nonprofit organizations (which concludes with 15 compliance options and eight next steps for nonprofits); and
2. Watch the recording of our brief overview of the proposed regulations from our town hall meeting yesterday.

Nonprofits and others have until November 7 to submit public comments on the proposed rule. The Center is preparing comments to DOL to explain the impact of the proposed rule on North Carolina nonprofits, to share that many North Carolina nonprofits approach the proposed regulations with a mixed sense of moral support and operational anxiety, and to advocate for possible changes in the final rule that could help minimize operational challenges for nonprofit organizations. 

To help us best advocate for the needs of North Carolina nonprofits in our comments to DOL, it is critical that we give clear examples of the potential impact of a higher salary threshold on the operations of charitable nonprofits with exempt administrative, executive, or professional staff who are currently paid salaries below the proposed threshold. Thank you to the dozens of organizations that have provided the Center with information about the potential impact on your nonprofit’s operations (we promise we have read your feedback even if we haven’t gotten back to you yet). If you have not yet responded, let us know by November 1 if your nonprofit has FLSA-exempt employees whose salaries are below $60,000 per year who may be converted to non-exempt employees because of the proposed DOL overtime rule (and if so, what the impact is likely to be on your nonprofit's operations).

NC House Passes Legislation to Delay Lobbying Fee Increases Until 2025

A provision in this year’s state budget increased the annual fee for lobbyist principals (including many nonprofits that lobby) and lobbyists (including many nonprofit staff and contractors) from $250 per year to $500 per year. This means that any nonprofit that registers to lobby with the state must pay a fee of at least $1,000 – and more if the organization has multiple registered lobbyists. North Carolina’s new lobbyist principal fee is, by far, the highest of any state in the country, and the lobbyist registration fee is also among the highest in the country. Even though the state budget did not become law until October 3, the lobbying fee increase was effective retroactively on July 1, 2023. 

The fee increases could create financial challenges for small and mid-sized nonprofits that advocate with the state legislature or state agencies and could discourage some nonprofits from lobbying or registering their staff as lobbyists. Check out the Center’s recently updated summary of North Carolina lobbying laws for nonprofits for details on when nonprofits and their staff need to register. The Center opposed this provision in the budget, and we have worked with the NC Professional Lobbyist Association (NCPLA) and others to advocate for financial relief for 501(c)(3)s that lobby. 

On Wednesday, the NC House of Representatives passed legislation to delay the implementation date of the lobbying fee increase until January 1, 2025. This delay would give the Center, NCPLA, and other affected organizations an opportunity to advocate for improvements to the law – including waiver or reduction of fees for 501(c)(3) nonprofits that lobby – during next year’s short session. Without the change in effective date, some nonprofits that lobby would need to register – and pay the higher fees – before the short session begins next year. The change was part of the budget technical corrections bill (S.508), which also made a variety of other adjustments to the state budget, including correctly identifying several nonprofits that receive directed grants but were listed incorrectly in the original state budget. Unfortunately, the Senate did not take up the budget technical corrections bill before adjourning yesterday, but the Center is advocating for the Senate to vote on it when it comes back into session in November or December. The Center is appreciative of the efforts of NCPLA and Representatives Jason Saine (R-Lincoln) and Donny Lambeth (R-Forsyth) in pushing back the effective date of the fee increase. 

For more on the state budget and nonprofits, check out the Center’s analysis of the nonprofit appropriations and provisions in the final version of the budget. We will update this document if the budget technical corrections bill becomes law.

Legislators Approve New Congressional and State Legislative Districts for 2024 Election

This week, the NC Senate and NC House of Representatives approved plans for North Carolina’s 14 congressional districts (S.757), 50 state Senate districts (S.758), and 120 state House districts (H.B. 898) to be used in the 2024, 2026, 2028, and 2030 elections. While federal law prohibits redistricting plans that dilute the voting power of racial minorities, a NC Supreme Court decision from earlier this year allows legislators to gerrymander districts to gain a partisan political advantage. 

To learn more about the new districts, click on the links below to see the maps of the new districts, along with the “stat packs” (which have data on voter registration, racial composition, and past election results for each district):

• Congressional districts – map and stat pack
• NC Senate districts – map and stat pack
• NC House of Representatives districts – map and stat pack

Because partisan politics is now a key component of North Carolina’s redistricting process, 501(c)(3) nonprofits – which cannot support or opposed political parties or candidates for office – were essentially left out of the redistricting process. Partisan gerrymandering ultimately diminishes the impact that 501(c)(3) nonprofits can have on policymaking because it creates incentives for most elected officials to be more responsive to their partisan political donors (which, by law, cannot be 501(c)(3) nonprofits) than to their constituents (including nonprofits providing services in their communities).

Both chambers approved the redistricting plans in party-line votes. The maps are likely to be challenged in federal court in the near future.

NC General Assembly (Mostly) Ends its 2023 Session

After approving the redistricting plans on Wednesday, the NC Senate and NC House of Representatives passed an adjournment resolution (SJR 760), officially ending the state legislature’s 2023 session. As part of the adjournment resolution, legislators will be in session for two-day mini-sessions each month between now and April 2024. Legislators can only take up a few types of bills – including voting on veto overrides, changes to redistricting plans, election law changes, and bills that are currently in House-Senate conference committees – during these mini-sessions. The first mini-session is scheduled for November 29-30. It is likely that legislators may not vote on bills during many (or any) of these mini-sessions.

The General Assembly will return for its 2024 short session on Wednesday, April 24, 2024. Legislators’ main priority for the short session will be to make adjustments to the state budget for FY2024-25. However, during the short session, legislators also can take action on a variety of other bills that passed either the House or Senate in 2023 or that affect state taxes or spending. Among the bills eligible for consideration during the short session are legislation to exempt nonprofits from paying sales tax on their purchases and to modernize the NC Nonprofit Corporation Act.

Take 2 Minutes to Sign on to Nonprofit Letter Supporting Streamlining Federal Grants Act

The Streamlining Federal Grants Act, a bipartisan bill in both the U.S. Senate and U.S. House of Representatives would help address many of the challenges that nonprofits experience with federal grants. Among other things, the bill would establish a Grants Council that would provide guidance to federal agencies on: streamlining and simplifying grant applications and reporting requirements; improving nonprofits’ user experiences with federal grants; and soliciting input from nonprofits and other partners on ways to improve the delivery of services to communities through federal grants.

To help encourage Congress to pass the Streamlining Federal Grants Act, a coalition of nonprofits led by the National Council of Nonprofits is sending a letter to leaders in Congress asking them to take action on it. The Center has already signed on to the letter, and we encourage your nonprofit to take two minutes to add your organization’s name to the letter (particularly if your nonprofit receives federal grants). The deadline to sign on to the letter is November 11.

Take (Another) 2 Minutes to Sign on to a Nonprofit Letter Supporting the Charitable Act

The annual Giving USA report found that individual giving declined by 13.4% last year. The Charitable Act (S. 566/H.R. 3435) would create a universal charitable deduction that would help offset recent reductions in individual philanthropy by encouraging people to give more generously to nonprofits. Specifically, the Charitable Act would create an above-the-line tax deduction (i.e., a tax deduction that taxpayers can claim on their Forms 1040 regardless of whether they use the standard deduction or itemized deductions) for non-itemizers who make charitable contributions. The deduction would be capped at one-third of the standard deduction (about $4,600 for individuals and $9,200 for couples).

In advance of next month’s Giving Tuesday, a coalition of nonprofits is sending a letter to leaders in Congress asking them to pass the Charitable Act. The Center has already signed on to this letter, and we encourage your nonprofit to take two (more) minutes to add your organization’s name to the letter. The deadline to sign on to this letter is November 17.

DHHS Publishes Materials to Help Nonprofits Provide Outreach on Medicaid Expansion

With Medicaid expansion beginning on December 1 in North Carolina, the NC Department of Health and Human Services (DHHS) has launched a website to help with community outreach. The website includes basic information on eligibility for Medicaid coverage, details of costs and coverage, and free materials to help nonprofits provide clear and accurate information about Medicaid and Medicaid expansion to their clients and communities. Please share this information widely, especially with clients who may now be eligible to apply.

Have Questions about Nonprofits and the 2023 Election? We Have Answers!



Election Day is just a week and a half away in many parts of North Carolina. Have you been wondering what types of election-related activities your nonprofit can and cannot do this year? You're not alone. The Center has been fielding questions about what types of election-related activities are legal and advisable for charitable nonprofits, and we have posted answers to 31 of the most common questions we are hearing. We have included information on several new state election laws that could affect your nonprofit and the people you serve, including the new requirement to show a photo ID when voting. Let us know of other questions you have about your nonprofit’s engagement in the 2023 election.

Center Offers Analysis of Impact of New Law on Nonprofit Training Programs

A new state law (S.364) that takes effect on December 1 could affect some training programs offered by North Carolina nonprofits. The law will prohibit any “state employee training program” from promoting 13 specific concepts, most of which are related to race and gender. Over the past few months, nonprofits have asked the Center a variety of questions to assess whether the law will apply to training programs their organization offers and, if so, what changes they may need to make to be compliant. To help your nonprofit better understand the law and its possible implications for your training programs, the Center has posted a synopsis of some of the questions we received – along with our best attempts at answers.

IRS Develops Process for Withdrawing ERTC Claims

The Internal Revenue Service announced this week that, because of the prevalence of Employee Retention Tax Credit (ERTC) scams, it has created a process that enables businesses or nonprofits that have filed for the ERTC but have not yet received payment on their claims to withdraw their claims without being subject to penalties or interest payments. If your nonprofit has applied for the ERTC and now realizes that you may not have been eligible for the tax credit, you may want to take advantage of this opportunity to withdraw your claim to avoid penalties and interest payments (and the possibility of unwanted negative attention).

Separately, the IRS announced last month that it will not process new ERTC applications until at least 2024. This means that nonprofits that were eligible for the ERTC for 2020 or 2021 and have not yet filed for the tax credit will need to wait until at least early 2024 for the IRS to process their applications. Nonprofits that have pending ERTC applications should expect delays during the moratorium period because the IRS is processing existing claims at a much slower pace than usual.

Current Center Member? Access your benefits or create your account.

Not a Center Member? Join now.

If a colleague forwarded this message to you, sign up for our emails.

Nonprofit Policy Update is North Carolina Center for Nonprofits' weekly newsletter of state and federal policy issues that affect all 501(c)(3) nonprofits. Learn about the Center's public policy priorities and agenda, or contact David Heinen, Vice President for Public Policy and Advocacy, for more information.

©2023 North Carolina Center for Nonprofits