Educating Nonprofit Employees: Pre-Tax Benefits

Imagine an employee who graduated with a degree in mathematics, handles finances for your nonprofit, and now wants to develop her skills by taking classes.  May the nonprofit help ease the accompanying tuition pain through pre-tax educational assistance?  To what extent may a nonprofit employer offer pre-tax educational benefits to its employees who seek to improve themselves, as a wonderful employee perk?   The short two-part answer is (a) up to $5,250, but with certain program conditions, or (b) to an unlimited monetary amount, so long as the educational program will develop the employee’s skills within her current role, and not prepare her for a different profession.

Paid Sick Leave Trending - Chicago and Beyond

Paid sick leave laws are steadily gaining traction among states and local municipalities across the United States.  The legislation is popular for employees but poses new challenges for employers now required to comply with a patchwork of diverse legal requirements.  This summer, Chicago became the latest city to join the trend, enacting a new sick-leave law effective July 1, 2017.  Here’s what is required for Chicago employers, and what all employers should consider in developing sick-leave policies.   

The National Trend – Challenging for All Employers

California, Oregon, Massachusetts, and the District of Columbia are examples of states that have recently adopted sick leave laws.  At the same time, more than 25 local municipalities have joined the bandwagon by enacting their own versions, including New York City, Seattle, Philadelphia, and now Chicago.  Due to this mix of new municipal and state laws, other states – particularly within the South and Midwest (excluding Illinois) – have responded by passing laws preempting local paid sick leave laws, seeking to avoid a complicated patchwork of local laws burdening employers. 

FLSA Overtime Rules Finalized: U.S. Department of Labor Raises Salary Threshold for Exempt Employees

The U.S. Department of Labor recently issued new overtime rules raising the salary threshold for “exempt” employees under the Fair Labor Standards Act, as anticipated within the Obama Administration’s closing months.  The new rule doubles the minimum salary from $455 per week ($23,660 annually) to $913 per week ($47,476 annually), effective December 1, 2016.  To address these legal changes and their implications, the Evangelical Council for Financial Accountability is offering a webinar on June 23, 2016, at 12 pm Central, with attorney Sally Wagenmaker as one of the featured speakers.  For more information and to register, please visit www.ecfa.org/Events.     

Background Basics

The proper classification of employees for FLSA purposes as “exempt” or “non-exempt” is an ongoing consideration for many nonprofits.  The FLSA imposes significant requirements for non-exempt employees, including minimum hourly wage amounts, “time-and-a-half” overtime pay obligations for more than 40 hours worked per week, and accompanying record-keeping requirements. An employer’s misclassification of its employees as exempt can result in serious liability under the FLSA when an employer fails to properly pay overtime or minimum wages. 

Under the DOL’s long-standing rules, the test for exemption is threefold and based on the following: (a) type of work; (b) whether the employee is salaried; and (c) salary amount.  The new DOL rule focuses on the salary amount.  Additional background information about FLSA requirements and development of the new DOL rule is contained in our law firm’s blogs – see August 2015November 2015, and March 2016