Overtime Pay for Nonprofit Preschool Teacher?

Dear Rita:

I'm a daycare worker for a nonprofit agency. My employer pays me a salary and refuses to pay overtime when I work more than 40 hours a week. The executive director says I'm not entitled to overtime pay because I am a "salaried teacher." I think the real issue is whether I am an exempt employee. I don't supervise other employees and I don't have a college degree or a license. What advice can you give me? -- Underpaid and Overworked

Dear Underpaid,

Your instincts are right on this one. From the facts you have given me you do not qualify as an exempt employee.

Some employers think that paying an employee a salary or designating an employee a "teacher" exempts that employee from the overtime rules. This is simply not the case.

Keep track of all overtime hours worked. If your employer refuses to pay overtime, you can contact your state Department of Labor for help. It is in your employer's best interest to properly classify you as nonexempt.

There are two tests that an employee must pass in order to achieve exempt status. The first is the threshold salary test. The Fair Standards Labor Act (FSLA) requires an exempt employee to make at least $455 per week ($1971 per month). Your state may have a higher threshold. For example, in California, the threshold salary is twice the state minimum wage of $8 per hour, or $2773 per month. An employee who does not make the higher of the federal or state threshold wage is automatically paid overtime for all hours worked.

You must also pass one of the duties tests. The law exempts people who meet certain qualifications in their duties as a professional, executive or administrator. Since you are a nursery school teacher and do not supervise other employees, I will focus on the professional duties test. In most states, licensed teachers who teach in a qualified educational institution are considered exempt employees, not subject to overtime pay. The key word here is licensed. Under the professional test, an employee must:

1. perform work requiring advanced knowledge

2. in a field of science or learning and

3. acquired by a prolonged course of specialized intellectual instruction.

A licensed teacher who teaches kindergarten or nursery school, disabled children or skilled and semi-skilled trades, meets the duties test of the professional exemption. You do not qualify for the professional exemption because you do not have a teaching credential and are not licensed.

Show the head of your school this article and let her know that you should be paid overtime wages.

Pamela Fyfe is an employment attorney with the Nonprofits Insurance Alliance Group, where she advises member nonprofits at no cost on employment and other matters. The Nonprofits Insurance Alliance Group is a founding and continuing sponsor of Blue Avocado.

Comments (4)

  • Since it is a nonprofit school, there is a possibilty that the FSLA does not apply. In researching exempt vs. nonexempt for our nonprofit I found the following at http://www.dol.gov/elaws/esa/flsa/scope/screen9.asp. Click on the “do I have to comply” button under employer. Click the “I don’t know” button on the next page you come to. Then click on the “companies/organizations with annual dollar volume…” button. Scroll to the bottom of the next page and click on “Yes” in answer to the "are you a non-profit" question. The following is the answer I got:

    "The Fair Labor Standards Act (FLSA) does not cover non-profit organizations except where the organization's activities are performed in connection with:

    A hospital, nursing home or school that is covered by the FLSA; or

    A commercial venture, such as a thrift store or gift shop, operated by the organization.

    If you have questions concerning whether your non-profit organization is performing a commercial venture and subject to $500,000 enterprise sales volume threshold please contact your local Wage and Hour District Office at the Department of Labor.

    If your company/organization does not engage in any commercial venture, then the FLSA probably does not apply to your employees on an enterprise basis. The law may individually cover your employees if their duties meet certain interstate commerce requirements."

    I would try and ascertain if your school is covered by FSLA first.

    Jun 16, 2008
  • Nonprofit organizations are not automatically exempt from the FLSA. In fact, the FLSA is a federal law that applies to most organizations with gross revenues over $500,000 and certain specified insutries regardless of the revenue, including schools. To determine FLSA coverage, you have to look at whether the organization is an enterprise engaged in interstate commerce or whether its employees are individually engaged in interstate commerce, commonly referred to, respectively, as either "enterprise" coverage or "individual" coverage. Thus, even if the entity is not covered under the FLSA due to its small size, an individual employee may be covered due to the type of work they perform.

    The Department of Labor and the courts utilize a fact-specific inquiry to determine whether the organization or the individual employee was engaged in commerce. Individual employees are engaged in commerce "when they are performing work involving or related to the movement of persons or things (whether tangibles or intangibles, and including information and intelligence)" between states. For example, employees who regularly use mail, e-mail, faxes, or the telephone for interstate communications or employees who ship or receive goods moving between states would be subject to the FLSA. Since practically all organizations today are somehow involved in commerce that goes beyond state boundaries, FLSA coverage is virtually universal.

    That said, there are a few reported court cases finding certain nonprofits not covered by the FLSA- but this is the exception, not the rule. Non-coverage under the FLSA is most likely if the organization has gross annual revenues of less than $500,000 and it is not in a specifically covered industry. However, the determination is fact specific and organizations are well advised to seek legal counsel before deciding that they are not required to comply with the FLSA.

    Additionally, many states have wage and hour laws regulating the minimum wage, overtime pay and exempt/nonexempt status of an employee that apply to all employers regardless of size. Thus, the analysis does not end with the FLSA but continues with a review of applicable state laws. For that reason, nonprofits should review both state and federal laws to determine their legal obligations when classifying an employee as exempt or nonexempt.

    Thanks for the opportunity to clarify this complex area - Ask Rita

    Jun 17, 2008
  • If an employee in Calif. makes $2000 per month, but supervises other activities in the office, is that person o. k. with an hourly rate?

    Jan 12, 2009
  • Ok. So nonprofits must comply with FLSA. But is it true that nonprofits (501c3s) may ask employees if they want comp time instead of paid overtime if the nonprofit awards it at time and a half? And if the employee wants comp time, they can give that? Comp time seemed to be only for the public sector. Help end the confusion! Thanks Rita! Ann H in Idaho

    Oct 18, 2013

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