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Policy Updates: DOL Overtime Rule, Federal Grants Changes, DAF Rule Hearings, and More
Wednesday May 15, 2024
Advocacy, Public Policy
Nonprofit Connect works to keep Members updated on policy changes that affect nonprofits through Policy Updates. These messages provide brief information on what is going on in government and policy that may be of interest to the nonprofit community.
Salary Threshold Requirements Raised by DOL Overtime Rule
In late April, the U.S. Department of Labor announced its Overtime Final Rule, which updates overtime protections for workers employed by nonprofits, for-profits, and government entities alike. The rule increases the minimum salary that employers must pay their white-collar workers in order to exempt them from the overtime pay rule of time and a half for any hours worked above 40 per week. The first adjustment occurs on July 1 – an inflation adjustment – which raises the standard salary threshold to $844/week ($43,888/year) and the highly compensated salary threshold to $132,964/year. Additional increases are scheduled for January 1, 2025 and July 1, 2027. After this third adjustment, the salary threshold will be automatically adjusted for inflation every three years. While it is likely the rule will be challenged in court, nonprofits should prepare for rapid implementation.
*** Read the National Council of Nonprofits’ Analysis of the final rule.
*** Learn more about revising the regulations issued under the Fair Labor Standards Act.
The Office of Management and Budget announced updates to its Guidance for Federal Financial Assistance. This document outlines the requirements for agencies making grants, cooperative agreements, and loans. The revisions are designed to reduce burdens on financial assistance recipients and clarify and streamline the process. Some of the changes include an increase of the de minimis indirect cost rate from 10% to 15%, a simplification of notice of funding opportunity documents, a requirement that federal agencies develop programs hand-in-hand with impacted communities, and a reduction in the number of pre-approvals recipients must receive before spending money. Federal agencies have until October 1st, 2024 to put these revisions into action. Read the National Council of Nonprofits’ analysis of the final rule.
*** NEW – register for the National Council of Nonprofits’ webinar: OMB Uniform Guidance: What the Updates Mean for Nonprofits on May 30th.
Earmarks Process Underway (Window to Apply has Closed); Restrictions Increased this Year on the House Side
Guidance from the House Appropriations Committee regarding Community Project Funding (earmarks) was finally released at the end of April. Many offices had already closed their application window or elected not to participate in the process at that time, while others offered only a few days to apply to meet committee deadlines. One surprise in the guidance for this year, however, was a ban on all charitable nonprofits receiving funding out of the Economic Development Initiative within the Department of Housing and Urban Development (funding that could provide for construction, acquisition, or renovation of properties, for example). This was reportedly a negative reaction by House Republicans who included three projects serving LGBTQ populations in a spending bill and then later stripped that funding away. Notably, this did not impact Senate rules, which were published separately; click here to earn more.Hearings Held last Week on Donor Advised Fund Proposed Regulations
The Internal Revenue Service and Department of the Treasury conducted public hearings on May 6 and 7 regarding regulations they are considering that attempt to clarify the rules for governing donor advised funds. The proposed regulations offer a clear definition of a donor advised fund, exceptions to what is considered a donor advised fund, and guidance on when taxable distributions may occur. Comments collected requested changes to the proposed rule, generally worrying that the proposed rules would have a chilling effect on the use of donor advised funds and other similar funds. Learn more.
President Biden’s Newest Proposed Student Debt Cancellation Plan Impacts Some Nonprofit Workers
In another proposed rule released last month, the administration’s most recent student loan debt cancellation plan would cancel some accrued interest, eliminate debt for certain borrowers (based on when they first entered repayment), authorize an automatic discharge of debt for whose who are otherwise eligible for loan forgiveness (including Public Service Loan Forgiveness, PSLF), and more. The public can comment on the proposed rule by this Friday, May 17th. Submit comments here.
Learn more
Missouri General Assembly
The Missouri General Assembly passed a $51 billion budget by the constitutional deadline of May 10th. In an unprecedented year, the Senate passed the budget after 8 hours of debate on Thursday, and the House took it up and passed it with only 8 hours of potential consideration on Friday; there was no conference committee to review and find compromise between the two chambers. The budget includes a pay increase for state workers and an increase in the base teacher salary. Last week, the Senate also passed an extension of the Federal Reimbursement Allowance, which is critical for funding Medicaid services; this now goes to the House for consideration. The Missouri General Assembly will adjourn this Friday the 17th. Learn more.
Kansas Legislature
The Kansas legislature held its three-day Veto Session at the end of April. Governor Kelly vetoed the second tax plan passed during the regular session, and the Senate fell one vote short of overriding the veto. However, the legislature took one more crack at a tax bill, which it passed on the final day of Veto Session. This tax plan would reduce the state’s three-rate structure to two, cut those two remaining rates, and eliminate taxes on Social Security and food starting this July 1st. Governor Kelly has indicated she will veto this as well and will call the body back soon for a special session. The Commerce Conference Committee also started assembling an incentive package focused on bringing professional sports teams to Kansas. HB 2096 also passed during Veto Session, which would expand the child and dependent care tax credit to 100% refundability and create the Office of Early Childcare.
Learn more
This blog is informed by the Nonprofit Champion, government websites, and various news articles. Read more from the National Council of Nonprofits on May 6.
You can also review the full 2024 National Council of Nonprofits Policy Agenda, here.
Stay tuned for more updates as the year progresses.
Notice: This post was written by Kristen Wood, Nonprofit Connect's Advocacy Contributor. Kristen is an avid participant in Kansas City’s nonprofit community and a self-proclaimed ‘lifetime learner’. In addition to working for Goodwill of Western Missouri & Eastern Kansas, she enjoys following nonprofit policy issues.
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