Center Submits Comments on the Proposed DOL Overtime Rule

Last week, the Center submitted comments to the U.S. Department of Labor (DOL) on its 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’s comments, which were based on input we received from more than 100 nonprofits (thanks if you shared input with us!), explained the impact of the proposed rule on North Carolina nonprofits and recommended several steps that DOL should take to minimize operational challenges for nonprofit organizations, including:

1. Treating nonprofits the same as other employers in the final rule;
2. Phasing in the implementation of the salary level threshold increase over several years to minimize immediate operational costs for nonprofits;
3. Setting the threshold no higher than $55,068 – and possibly lower than that – during the initial phase-in period;
4. Considering setting different salary level thresholds for employers in different states or regions;
5. Clarifying in its final rule the actual compliance costs of the higher salary level threshold for nonprofits and other employers;
6. Actively encouraging government and philanthropic grantmakers and the donating public to consider increasing their investment in nonprofits’ operational costs to offset the higher payroll expenses that will accompany this rule change; and
7. Providing guidance to help nonprofits assess whether common nonprofit jobs – including fundraising/development staff, volunteer managers, and child care workers – meet one or more of the duties tests for executive, administrative, and professional workers.

In addition to the Center’s comments, many of the other 33,000+ comments on the proposed rule focused on the rule’s potential impact on nonprofit organizations, including:

• The National Council of Nonprofits, which explains why many nonprofits approach the proposed rule with a mixed sense of moral support and operational anxiety and proposes solutions that are mostly in line with those of the Center.
• Congresswoman Virginia Foxx (R-NC), in her role as Chair of the U.S. House of Representatives Committee on Education and the Workforce, calling on DOL to rescind the rule in part because it would “substantially increase costs for nonprofit organizations, reduce donation collections, and make those organizations less competitive in recruiting and retaining employees.” 
• The U.S. Small Business Administration Office of Advocacy, which asks DOL to provide a more comprehensive and accurate analysis of compliance costs for small businesses and nonprofits and to adopt a lower standard salary level in its final rule. 

To learn more about the proposed rule and its potential impact on North Carolina nonprofits, you can:

1. Read the Center’s  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 the Center’s brief overview of the proposed regulations from our town hall meeting two weeks ago.

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). Today (November 10) is the deadline to sign on to the letter.

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

Earlier this year, 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 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 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 Friday, November 17.

Join a (Free) National Webinar on Government Grants Reform on November 20

As many nonprofits have learned from experience, the government grant system is broken. Fortunately, several solutions are available to fix the system, but these changes will only happen if nonprofits take action. To help your nonprofit learn more about potential solutions to government grant challenges – and steps your nonprofit can take to help make these solutions become a reality, the National Council of Nonprofits is hosting a nationwide webinar, The Urgency of Government Grants Reform for Your Nonprofit, on Monday, November 20 from 3:00-4:15 p.m. This webinar will: (1) highlight frequent challenges charitable nonprofits face when seeking and performing government grants; and (2) identify promising opportunities for reforming broken grants laws and practices at the federal and state levels.

Participants will hear from experts on the results of bad grantmaking policies and learn about legislative and regulatory solutions that you can help influence. Register today!

Note: The webinar will be recorded, so be sure to register to receive the presentation materials and the program recording even if you are not available to join live the afternoon of November 20.

Center Offers 2023 Legal Compliance Checklist for North Carolina Nonprofits

The Center’s weekly Nonprofit Policy Update (i.e., the email you are reading right now!) provides updates on new and proposed legislation and regulations that might affect your nonprofit’s operations and mission. The Center also recognizes that it is helpful for nonprofits to review the many federal and state laws (some new, some longstanding) that are necessary for your nonprofit to remain compliant. With this in mind, the Center has published its annual Legal Compliance Checklist for North Carolina Nonprofits, a comprehensive summary of laws affecting NC nonprofits’ tax exemption, governance, finances, advocacy, human resources, and fundraising – and how to comply.

The Legal Compliance Checklist is included as part of membership in the Center. If your nonprofit is a Center member, all of your staff and board members have access (download it here). The Legal Compliance Checklist is also available for purchase for nonprofits and others that are not Center members (purchase it here). Any 501(c)(3) nonprofit can also become a Center member to get free access to the Legal Compliance Checklist and a wide range of other resources and services.

DHHS Publishes Materials to Help Nonprofits Provide Outreach on Medical Expansion

With Medicaid expansion beginning on December 1 in North Carolina, the NC Department of Health and Human Services (DHHS) has begun contacting the 300,000 North Carolinians who will automatically be enrolled in Medicaid next month. This month, North Carolinians who are newly eligible for full Medicaid benefits will:

• Get a letter from their local Department of Social Services letting them know they will start getting full Medicaid coverage;
• Be assigned a health plan; and 
• Receive a packet from their health plan in the mail that includes a new Medicaid ID card.

Additionally, new Medicaid participants who currently have health coverage through HealthCare.gov will need to cancel their plan once they are enrolled in NC Medicaid. If your nonprofit provides direct services to people who may qualify for Medicaid expansion, we encourage you to share this information with them so they don’t miss these important pieces of mail.

DHHS also has launched a new website to help with community outreach on Medicaid expansion. In addition to the 300,000 North Carolinians who will be automatically enrolled in Medicaid next month, another 300,000 North Carolinians will be eligible to apply for Medicaid beginning on December 1. The DHHS 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!

Federal Government Shutdown Looming Again

On September 30, both the U.S. House of Representatives and the U.S. Senate passed a 45-day spending bill (H.R. 5860) that temporarily prevented a federal government shutdown by funding federal agencies and programs at existing levels through November 17. With that continuing resolution set to expire in a week, Congress once again faces the threat of a partial shutdown of the federal government. To avoid a shutdown, Congress must agree on details of either:

1. The 12 appropriations bills to fund the federal government through September 30, 2024; or
2. A stopgap spending bill known as a “continuing resolution” to provide temporary funding for the federal government and give the U.S. Senate, U.S. House of Representatives, and the White House more time to negotiate full details of an appropriation plan.

The Center for a Responsible Federal Budget has a helpful summary of the impact of a federal government shutdown, including details about the government programs most likely to be affected immediately and the fiscal impact of a shutdown. Government shutdowns can harm nonprofits and the communities they serve by causing delays in nonprofits’ payments from federal agencies and creating disruption in the delivery of federal benefits.

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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