Non Profits Need to Pay Overtime, Too

Posted by marykeating on September 17, 2009 under Federal wage and hour law | Be the First to Comment

The Fair Labor Standards Act requires overtime pay for non-exempt employees who work more than forty hours in a week.  A nonprofit organization in Florida is being sued for refusing to pay overtime to a worker who regularly logged more than 70 hours per week, as an “assistant manager” of a Ronald McDonald House.  The article is intriguing because the lawyers are unusually candid.  The plaintiff’s lawyer worries that some may criticize his client for suing a nonprofit with such a noble mission, while a management side lawyer admits that nonprofit organizations are more likely than for profit companies to violate these laws, saying that “nonprofits tend to treat most workers as exempt from overtime regulations.”  The management side lawyer quoted in the article, Michael Casey III, of Becker, Epstein & Green, is not this defendant’s lawyer – the suit was just filed on September 10.

Although religious organizations have some special exemptions, nonprofits as a group are held to the same standards as other employers.  Given that they often work with volunteers, too, these organizations may tend to treat their employees as freely available for off the clock work.  Nonprofits need to mark a bright line between their paid workers, who should be able to choose how to spend their free time, and volunteers.  The good news is that local nonprofits have reported that donations have not taken a nose-dive with this economy.  Instead, it appears that people who still have jobs are even more sympathetic than ever to the plight of the less fortunate.  The bad news is that costs for all employers continue to rise, affecting nonprofits and for-profits alike.

To avoid costly lawsuits, charitable organizations need to treat their employees fairly and try to fill in the funding gaps with increased fundraising, or volunteer help.  Under the Fair Labor Standards Act, an employee is usually entitled to recover double the unpaid wages, as well as attorney’s fees, for wage and hour violations.