Proposed Overtime Rule Change for Montana Nonprofits

March 28, 2024 / Comments Off on Proposed Overtime Rule Change for Montana Nonprofits

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Do you have exempt employees making less than $55,000 a year? You’re not alone. Read below to see how the proposed rule change might impact you and suggested steps:

The Fair Labor Standards Act has a proposed rule change that may impact nonprofits. MNA hosted a webinar on March 27th with Westaff and Montana State Department of Labor Bureau Chief to explain the rule and options for nonprofits.  

View the recording below and view slides here

The rule change is slated to go into effect at some point in April 2024. MNA will update this page with information on that date as we have it. There may also be some interpretation against Montana code and updates for employers to consider, which we will also provide more information on as we have it. 

Essentially, the rule proposes to increase the minimum salary for exempt employees. Currently, exempt employees meet the salary basis test if they make $35,568/year or $684/week. When the rule goes into effect, this amount will change to $55,068/year or $1,059/week, a substantial increase. 

We advise nonprofits begin preparing themselves now to be ready when the rule change does go into effect, recognizing that many exempt employees do not meet this salary threshold in the nonprofit sector. 

Step One: 

  1. Review salaried, exempt employees and make sure they meet the duties test to be exempt. 
  1. Review the hours worked by current exempt employees to see if they are working over 40 hours each week. 

Step Two: 

Options for you to consider for exempt employees who make less than $1,059/week or $55,068/year: 

  1. Raise salary and keep employee exempt. Depending on current pay, this could cost as much as $19,500/year per exempt employee 
  1. Convert status to nonexempt, pay hourly, and track overtime. Depending on current pay, this could cost the organization up to or over $6,669/year, based on 5 hours of overtime each week. 
  1. Keep employee at current salary and pay overtime. Review US DOL Fact Sheet #82 to see how to calculate overtime when paying someone on a fluctuating workweek basis. 

Questions? Reach out to MNA for more information and updates or talk through your specific scenario directly with the Department of Labor:

Department of Labor | Wage Standards Division

(406) 444-6543

[email protected]

www.dli.mt.gov