Like so many other people, I am a sucker for year-end predictions. I suspect it has something to do with being uncomfortable with an uncertain future. So, for each of the last few years, I’ve blogged about non-profit predictions and trends during the final few days of the year. Needless to say, I can’t resist doing it again as 2015 comes to a close. Drum roll please? I predict non-profit organization in 2016 will . . .
Grapple with HR issues
In mid-2015, the Department of Labor announced its proposal to dramatically increase the minimum salary levels for individuals classified as exempt executive, administrative or professional employees. This announcement kicked off a public comment period and prognostications that new rules will go into effect in 2016.
My prediction of “confusion” is based on the following facts and observations:
- I’ve heard some experts pontificate on the impact this rule change will have on the non-profit sector (e.g. layoffs, reorganization and consolidation of positions, outsourcing, etc)
- I’ve heard other experts insist the law doesn’t apply to the non-profit sector (e.g. the key criterion for this FLSA provision is “business or sales revenue” which is a standard most non-profits don’t meet)
- I’ve seen one national non-profit organization swing into action with webinars on how to position local affiliates for these anticipated changes
- I’ve sat in meetings with clients who are talking about how they anticipate this rule change will impact their 2016 budget and staff structure
- I’ve worked with a client in New York State who dealt with this when Governor Andrew Cuomo enacted a similar rule change last year and seen the challenges they’ve endured
- I’ve reviewed some of the non-profit submissions during the public comment period and walked away with that feeling of anxiety in my belly (. . . and needless to say, people are stressed out this)
- The Department of Labor seems to be signalling a delay in implementing changes (most experts anticipated implementation in early or mid 2016 and now it looks like it will happen in late 2016)
Do you want more proof of confusion? Check out the headlines on the following online articles and posts (and each post is worth a click if you have time):
- Nonprofit Quarterly: “The Debate over Reforming Overtime Regulations“
- Economic Policy Institute: “Why Nonprofits Shouldn’t Fret Over the New Proposed Overtime Rules“
- Wage & Hour Insights blog: “New Exemption Rules May Be Delayed To Late 2016“
Of course, anything is possible:
- Non-profits may get an exemption or they may not
- The proposed minimum salary of $50,440 may go up and it may go down
- DOL may change its “job duties tests” for executive, administrative and professional employees
Until the Department of Labor makes its final determination and announcement, I think it is safe to say there will be continued speculation. Moreover, I think once the changes are announced, those non-profit organizations who didn’t put contingency plans in place will find themselves in a chaotic place.
If after reading this far, you are experiencing a “bubbling, acidic feeling in your gut,” then I have a few suggestions for you:
- Don’t put your head in the sand and wait for DOL to issue changes to FLSA . . . start your planning now
- Identify all of your salaried exempt employees and make preliminary determinations on which ones you can/should increase to $50,000-ish and which employees you might have to change to a non-exempt status
- Revisit your organizational budget, invest some time into “scenario planning,” and develop a few different budget options your board can consider once the changes are announced
- Engage your HR Committee volunteers in these discussions and enlist their help in your planning efforts (if this committee doesn’t exist in your organization, then create a temporary ad hoc task force comprised of supporters with an HR background)
- Engage your Finance Committee volunteers in these discussions and enlist their help in your planning efforts (if this committee doesn’t exist in your organization, then create a temporary ad hoc task force comprised of supporters with a finance background)
- Start talking about it in your boardroom (this might be a great opportunity to ask board members to read an article or two and come prepared to participate in a generative discussion during a board meeting)
Today’s post reminds me of an old United States Marine Corps expression:
“Proper Planning and Preparation Prevents Piss Poor Performance“
With this in mind, what are your thoughts, experiences and suggestions? Please use the comment box below to share. We can all learn from each other.
If you want to read some of my previous year-end predictions, here are a few links that will get you there:
- 2012 Trends and Predictions: Executive Transition
- 2012 Non-Profit Trends and Predictions: Rise of the Machines
- 2012 Non-Profit Trends and Predictions: Contraction Continues
- 2012 Non-Profit Trends and Predictions: Volunteerism
- The Final 2012 Non-Profit Prediction (I think this is my favorite prediction of all times)
- 2014 predictions for the non-profit sector
- Setting a New Years Resolution or two? Have you identified your obstacles yet?
- Fundraising New Year’s Resolution — Sustainable Giving Strategies
- Fundraising New Years Resolution — Upgrade Strategy
Here’s to your health!
Founder & President, The Healthy Non-Profit LLC