At Habitat for Humanity in Greater Portland, we work day in and day out to ensure that all Maine families have a decent place to live. Founded in 1985, Habitat for Humanity of Greater Portland is committed to the development and uplifting of families and communities in 28 communities in the Portland area. Over the past three decades, we’ve built 75 homes, providing hundreds of people with stable, affordable housing. We have engaged hundreds of business and civic partners, and enlisted the support of thousands of volunteers.
Admittedly, this isn’t an easy task. As is the case for many nonprofits, the need for our services is great and ever growing. But we’re up to the challenge and we are always working hard to get better, measuring our performance and using our resources efficiently to best serve as many clients as possible.
While there are always obstacles to overcome, the latest is poised to dramatically affect our ability to provide services. It’s a real game-changer for nonprofits across Maine.
The U.S. Department of Labor has proposed a new overtime rule that would significantly increase overtime pay obligations for employers and is expected to be finalized this month. The current threshold salary of $23,660 per year would more than double to $50,440. Recent reporting indicates that the Labor Department “compromised” at $47,500, which is still double the current threshold.
In addition, going forward, the threshold would automatically be increased every year (something that has never been done before) based on an unpredictable schedule, with employers given only 60 days’ notice to figure out how they can comply with the change.
As a nonprofit dedicating our resources to serving Maine families, we typically cannot afford to pay high salaries such as other large businesses in more urban parts of the country, but we do offer our employees competitive pay and benefits. Furthermore, our employees choose this line of work because they spend each day helping others to reach their fullest potential. And at the end of the day, they head home knowing that their work has made a difference.
The Labor Department’s new overtime rules will so drastically change our current compensation obligations that we may no longer be able to give our workers the benefits, schedules and other incentives that drew them to us in the first place. Businesses can raise prices to compensate for higher overhead costs (although they often lose sales when they do), but nonprofits have to absorb the loss, often cutting services or jobs when resources are stretched too thin.
We are not alone. Nonprofits in Maine and across the nation are extremely concerned about the overtime change. Services to those in need will be reduced and organizational funding will decline as resources are spent on overhead instead of programs.
Recently, Sen. Angus King sent a letter to the Office of Management and Budget outlining his concerns and urging the Labor Department to slow down and consider the impact that such a role will have on organizations such as ours in rural states such as Maine.
There is now legislation, the Protecting Workplace Advancement and Opportunity Act, that would require the Labor Department to perform a detailed impact analysis before implementing changes to the exemptions. The bill requires the Labor Department to address many of the concerns outlined in King’s letter, including that the agency’s analysis of the rule did not consider the impact the proposal would have on various regions of the country with different costs of living.
We do not disagree that a reasonable increase to the salary threshold might be due, and the bill does not prevent an increase in the salary threshold. It merely requires the Labor Department to more closely examine the impact of possible changes before proceeding with a final rule.
In our state alone, the proposed rule change would affect an estimated 20,000 workers. Maine’s delegation should stand together in support of the Protecting Workplace Advancement and Opportunity Act, speak up against this overly burdensome rule change and speak up for those in Maine who benefit from nonprofit services.
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