Important Information for Nonprofit Employers

Changes in state & federal law will impact nonprofit employers. Here is a summary of new changes that will go into effect July 1, 2024 and resources to support compliance:

  • Overtime Final Rule:
    The U.S. Department of Labor (DOL) has released its Overtime Final Rule designed to update and revise overtime protections for millions of workers employed by nonprofits, for-profits, and governments. The final rule, set to start going into effect on July 1, 2024, increases the minimum salary level that white-collar employees must be paid to exempt them from overtime pay of time and half of wages for hours worked in excess of 40 in any week.
    • Learn More
    • 6/3/24 Update from the National Council of Nonprofits: In 27 days, the Labor Department’s Overtime Final Rule is scheduled to take effect, requiring employers to pay “white collar” employees salaries of at least $844 per week ($43,888/year) for the employees to remain exempt from overtime pay of time and half of their hourly rates. Learn more about the Overtime Final Rule. In late May, more than a dozen business organizations filed suit seeking to block the Overtime Final Rule from going into effect. Filed in Plano, Texas – the same division of the federal district court that struck down the proposed overtime rule at the end of the Obama Administration – the business groups seek the same outcome: to have the rule vacated/enjoined and declared beyond the Labor Department’s authority. They hope to block the increases in the salary level thresholds from going into effect on July 1, 2024, as well as a separate, more significant hike on January 1, 2025. They are also asking the judge to block DOL’s plan to index the thresholds for inflation every three years. The gist of their argument is this: “In a manner prohibited by this Court in 2017, the 2024 Rule raises the minimum salary threshold so high that the new salary threshold is no longer a plausible proxy for the categories exempted from the overtime requirement by Congress.” It is impossible to accurately predict when or how the federal judge in Texas will decide on whether to block the rule from going into effect; nonprofits should be preparing now for the overtime changes to ensure compliance.
      Complaint: Plano Chamber of Commerce, et al. v. Su., May 22, 2024.
    • Read: New Overtime Rule: Nonprofits May Need to Boost Pay for Nearly 500,000 Workers, Jim Rendon, Chronicle of Philanthropy, May 23, 2024.
  • Unemployment Insurance:
    As of July 1, 2024, ALL nonprofit entities, regardless of size, that have paid any amount of wages, will be required to be registered with the Vermont Department of Labor to participate in Unemployment Insurance. These requirements include filing quarterly wage and contribution reports, paying any associated contribution amount, and reporting newly hired employees within 10 days of their employment.
  • Child Care Payroll Tax:
    The 2023 Childcare Bill, Act 76, expands access to and funding for childcare. It also imposes a .44% payroll tax that will go into effect July 1, 2024. Employers may elect to cover the tax in full, or split it with employees – 0.33% paid by the employer and 0.11% paid by the employee. More information:

Another piece of employment news already in effect:

Vermont Family and Medical Leave Insurance (FMLI):
The voluntarily program for employers with 2 or more employees launched in February. With Family and Medical Leave Insurance (FMLI) from The Hartford (the partner chosen by the state), an employee is able to have a portion of their income replaced — while they take the time needed to care for a child, spouse, parent, or themselves. In 2025, self-employed workers / employers with fewer than two employees will also be eligible. Learn more here.