A cursory look at the overtime pay rule announced by the Obama administration on May 18 could present it as a very good thing, more so when it is projected to benefit over 4 million U.S. workers in its first year starting December 1.

Simply put, the rule requires employers to pay overtime to workers with annual earnings under $47,476 for working more than 40 hours a week.

To Vice President Joe Biden, the implication is that “the worker wins.” But is it that simple at many nonprofits?

Paying the mandatory overtime could easily drive overheads through the roof, and consequently reduce charitable contributions from individuals and families who like supporting nonprofits with low overheads. In my nearly 19 years of serving metro Detroit through Detroit Rescue Mission, I have never met individual donors who adjudged high overheads as needful and helpful to nonprofits.

They want us to plough the bulk of their donations into cost-effective programming that results in rehabilitating human trafficking victims, substance abusers and homeless women, children and veterans, among others. And most of these individual donors are not rich. In fact, many are seniors living on meager income but routinely responding to the call of their conscience to be their neighbors’ keepers.

As government grants and institutional donor sources become harder to get due mainly to new regulations and “fatigue”, many nonprofits are increasingly depending on the generosity of individuals and families – even as the number of those needing their life-saving services go on the rise.

Because all nonprofits are not created equal, they will not adapt to the new overtime rule the same way. For instance, universities and community colleges may readily pass on the increased overhead costs to students, and hospitals can do the same to their patients, which is unfortunate.

The case is different with human service organizations serving vulnerable, underserved and financially distressed individuals and groups. So, they would resort to eliminating some vital programs and retrenching the employees who run them or turning many full time employees into part-time, just to reduce overheads.

They would also find it expedient to freeze promotion of employees in certain pay brackets, thus limiting upward mobility opportunities for those workers.

Imagine what the morale will be when many employees feel demoted or stagnated. Poor morale is tantamount to poor productivity, which, of course, hurts not only the nonprofits but also the communities they serve.

I completely agree with the good book that workers are worthy of their fair wages. Yet, the same book also tells us that such wages should be as negotiated between the employer and the employee (see Matthew 20).

Thus, a nonprofit that is able to pay overtime to employees who work over 40 hours a week should not hesitate to do so because the happier the employees, the better the performance of the organization.

As for those who are unable to pay it – and find the necessary timecard systems costly and cumbersome – the new rule could undermine their operations and create distrust between employees and their employers.

And what happens when the millennials who use small and medium-sized nonprofits to gain much-needed job experience find that such opportunities are drying up?

What happens when the many retirees who choose to work at nonprofits as their way of giving back to the community are made to think more about pay than community service? Or when the dwindled operational costs of these nonprofits force them to reduce or stop patronage of employment generating small businesses that provide them important services?

Like any good employer with conscience, I want the best for all my employees. Sometimes, I wish I could pay them the varying amounts they want. But if a new regulation directly or indirectly threatens the continued existence of our reputable organization and the quality of our programming, we all could become unemployed soon. Then, everyone loses.

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