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Save the Date - 2017 Louisiana State Combined Charitable Campaign Charity Applications will be available 1/6/17!

Posted By Robin Taylor, Louisiana Association of United Ways, Monday, December 12, 2016

Save the Date: 2017 Louisiana State Combined Charitable Campaign (LA SCCC) Charity Applications will be available Friday, January 6,2017.

 

Please visit  www.lasccc.org/application for more information.

 

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Telling the not-for-profit story through Form 990

Posted By Don Engler, Wegmann Dazet & Company, Monday, December 12, 2016

Telling the not-for-profit story through Form 990

Reporting requirement provides an opportunity to educate potential donors, grantors, and board members on the organization’s merits.

By Maureen Butler, CPA, Ph.D., and Brian Butler 

December 1, 2016

Sec. 6033 of the Internal Revenue Code requires most tax-exempt organizations to file an annual information return containing income, receipts, disbursements, and other information. This seems to be a straightforward requirement—not-for-profit organizations complete and submit a Form 990, Return of Organization Exempt From Income Tax, to the IRS for filing. Charitable organizations, however, can capitalize on this compliance requirement by using it to educate donors and market their organizations and programs. Consider these scenarios:

  • Scenario No. 1: Students in Science Inc. has a new funding organization that requires a financial audit. The executive director contacts S & Co. CPAs to inquire about obtaining the audit and the associated fees. Before agreeing to meet with Students in Science, S & Co. looks up the organization's Form 990 to learn more about its operations and viability.
  • Scenario No. 2: Protecting Pets Charities has applied for a grant from Sunshine Bank Foundation. Part of the award selection process involves reviewing Form 990 to determine whether the mission and accomplishments of Protecting Pets' programs are aligned with the purposes of the foundation grants.
  • Scenario No. 3: JT, CPA, has been asked to serve on the board of Best Bet Family Solutions. Before accepting the offer, she examines the organization's Form 990 to determine whether the mission and programs of Best Bet are aligned with her values and priorities, and if the governance structure has been established in a way that will protect her as a board member.

While the names have been changed, these scenarios illustrate how individuals use Form 990 to perform due diligence in considering whether to commit time or resources to a not-for-profit, whether as a service provider, a grantor, or a board member. In fact, the 2015 instructions for Form 990 state, "Some members of the public rely on Form 990 or Form 990-EZ as their primary or sole source of information about a particular organization. How the public perceives an organization in such cases can be determined by information presented on its return."

 

With an increased number of not-for-profits competing for the same pool of donors, each not-for-profit needs to be strategic in communicating its mission, marketing, and fundraising. Brochures and websites should not be the extent of a not-for-profit'sexternal communications. Although it is an information tax return, Form 990 is a key component of an overall communications plan designed to enhance a not-for-profit's fundraising and marketing efforts.

Debra Faulk, vice president of Community Affairs at Wells Fargo, reviews current- and prior-year Forms 990 in her evaluation of not-for-profit grant applications to get a more comprehensive picture of the organization. "The [Form] 990 gives me a snapshot of the financial health, governance, and operations of our applicants in one document," she said. "I can't emphasize enough how important it is for nonprofits to sell themselves in the mission and program descriptions required on the Form 990."

 

While CPAs prepare Forms 990 because of the financial reporting requirements, they can add value to their preparation services by ensuring that the form's narrative sections tell the not-for-profit's story of how it is fulfilling its mission. Paul Horowitz, CPA, a partner with FRSCPA PLLC, recognizes the value-added services he provides by considering the nonfinancial sections of Form 990. "By paying closer attention to the narrative sections, I am able to help my clients market their services and their organizations to potential donors," he said. "The Form 990 is not just a tax return."

 

Simply inserting information from the not-for-profit's website or other marketing materials does not ensure the mission and program descriptions reported on Form 990 are current, accurate, and compelling. This article provides tools to assist CPAs with ensuring this important aspect of Form 990 is used to benefit the not-for-profit organization.

 

WHO IS READING AND WHY?

Not-for-profit organizations and CPAs are mistaken if they think no one is actually reading the information on Form 990. The scenarios presented at the beginning of this article illustrate some of the reasons people read Form 990 and how the information is used. A number of organizations provide information online about Form 990 and the not-for-profit's financial statement, which many donors use before donating. In addition, in June, the IRS announced that it would make Forms 990 available electronically.

 

Sec. 6104(b) requires not-for-profits to make their Form 990 available to the public, unlike their financial statements. Consequently, savvy not-for-profit evaluators take advantage of this resource. Rather than shrinking back from this requirement and minimizing the amount of information provided on Form 990, organizations can make the most of the requirement by telling their story and selling their organization. The chart, "What Readers Look for on Form 990," lists different users' nonfinancial objectives in examining a Form 990.



WHAT READERS LOOK FOR ON FORM 990

What is a common thread among these readers? They all use Form 990 to make decisions that affect the organization's ability to obtain funding, provide services, maintain proper governance, and, ultimately, achieve the goals for which it exists. Clearly and compellingly explaining the mission and program accomplishments communicates the organization's value for these and other stakeholders.

 

NARRATIVE SECTIONS

Some not-for-profit executives think that since Form 990 is submitted to the government, less information is better. Although the IRS and some states use the form for compliance and monitoring purposes, not-for-profits should be eager to take advantage of the opportunity to tell their story through Form 990's narrative sections. According to Faulk, "The 990 tells a story; a story of the nonprofit organization's mission, partnership, and client/constituent support." The sections that organizations can use to convey this information include:

  • Part I, "Summary," line 1 (mission or most significant activities).
  • Part III, "Statement of Program Service ­Accomplishments," line 1 (mission).
  • Part III, "Statement of Program Service ­Accomplishments," line 4 (description of individual program service accomplishments).
  • Schedule O, Supplemental Information to Form 990 or 990-EZ (continuation of the narrative sections as well as explanations of answers in other sections).

COMMUNICATING WITH WORDS AND NUMBERS

CPA preparers may find it efficient to lift content from the organization's website or other marketing materials and place it on Form 990 (see the sidebar, "Examples of Ineffective and Effective Narratives"). However, this may not be the best way to communicate the organization's mission, programs, and values—to tell the organization's story. Effective Form 990 narrative descriptions that tell the organization's story will begin with two communications fundamentals.

  • Consider the audience. Who is likely to read the Form 990? Donors, third-party evaluators, potential board members, etc.?
  • Develop focused messages. What are the main points that will resonate with the audience? The efficiency of the organization, the effectiveness of the programs, information about the clients and staff, etc.?

After these two issues are determined, messages can be crafted that focus on communicating with particular audiences. The content should be centered on the organization's unique qualities, programs, and clients; the method of accomplishing its mission; the results of its programs (quantitative and qualitative); its value to the community; and its effectiveness and efficiency in using resources and responding to challenges. As an example, for an educational program, describe the type and number of classes offered, the number of pupils participating and completing the program, and how successful the participants were (perhaps using employment statistics) compared with a similar population not receiving the same services.

 

The style of writing used in the Form 990 narrative sections is just as important as the content. These sections should be clear and convincing. Not-for-profits tend to use terminology or jargon that may be unique to the sector or to the particular field of work. Donors and other Form 990 audiences may not understand terms such as "mission-driven," "capacity," or "development." Using terms that lay people understand ensures the messages are clear. For potential donor audiences, these messages should convince readers that the organization is worthy of their contributions. Assuming that the audience has the same affinity or commitment to a cause or the organization as the staff or board may hinder the message’s effectiveness.

 

CPA preparers are encouraged to ask their clients to put careful thought into writing these narratives, and they should ensure the financial and nonfinancial information communicates a cohesive story about the organization. Preparers should work with the organization to craft these sections and then insert them in the form. This is how the Nonprofit Leadership Center in Tampa, Fla., completes its Form 990. "While our CPA firm prepares the form, we write the mission and program descriptions in a way that communicates the value our organization offers to the community and the quality with which we carry out our work," said Emily Benham, the organization's CEO.

 

TELLING THE STORY

CPAs generally prefer working with quantitative and precise information, an attribute not usually associated with storytelling. However, CPAs preparing Forms 990 are uniquely situated to partner with not-for-profit clients in telling their story through both the financial and nonfinancial narrative sections of Form 990. With a competitive market for donors, organizations need to be strategic in their external communications. A well-crafted Form 990 can work in addition to websites, brochures, and other marketing materials to meet not-for-profit communication objectives.


Examples of ineffective and effective narratives

What do actual narratives look like? They can be brief or extensive. They can be clear or confusing. They can spur the reader to seek more information, or they can miss an opportunity to inform the reader. Here are examples of actual Form 990 content.

  • Part I, “Summary,” line 1: Briefly describe the organization’s mission or most significant activities.

Nonprofit A

Answer: See Schedule O.

Ineffective: Misses an opportunity to provide the mission at the top of the form; no information is provided that will encourage readers to go to Schedule O.

 

Nonprofit B

Answer: Financial support to cancer patients.

Effective: States what the organization does and for whom.

 

Nonprofit C

Answer: Care for the homeless and those at risk of becoming homeless.

Effective: States what the organization does and for whom.

  • Part III, “Statement of Program Service Accomplishments,” line 1: Briefly describe the organization’s mission.

Nonprofit A

Answer: See Part I

Ineffective: Does not provide new information; refers to Part I, which refers to Schedule O; no information is provided regarding the mission in Part I or Part II.

 

Nonprofit B

Answer: Financial support for cancer patients.

Adequate: Restates the mission in Part I but misses an opportunity to provide additional information.

 

Nonprofit C

Answer: To care for the homeless or those at risk of becoming homeless in our community through services that alleviate suffering, promote dignity, and instill self-sufficiency . . . (See Sch O)

Schedule O information: 10,500 volunteers . . . Support from private donations, businesses and corporations, private and corporate foundations, and government grants . . . $5,000 in-kind services and $10,000 in-kind food and material donations above financial donations . . . Volunteer time valued at more than $3 million . . .

Effective: States the mission and provides additional information about how the organization fulfills its mission in Part III, then expounds in Schedule O with more qualitative and quantitative information describing how the mission is accomplished.

  • Part III, "Statement of Program Service Accomplishments," line 4: Describe the organization's program service accomplishments.

Nonprofit A

Answer: Provides funding for basic needs of our clients and training for our volunteers.

Ineffective: Does not describe program or provide quantitative and qualitative information about the program's effectiveness.

 

Nonprofit B

Answer: Worked with over 90 participating community charities to provide funds for their charitable activities through a matching program based on pledges obtained by charity volunteers.

Adequate: Briefly describes the program and how it works; provides some quantitative information indicating the magnitude of the program.

 

Nonprofit C

Answer: Provided meals to 50 partner organizations located throughout the local area where anyone who is hungry is fed . . . 3,000,000 meals, helped 50,000 people with clothing . . . 6,000 at-risk children received new backpacks . . . See Schedule O.

Effective: Describes the activities and results of the program using quantitative information to explain the program's magnitude and effectiveness.


About the authors

Maureen Butler (mbutler@ut.edu) is an associate professor of accounting at the University of Tampa in Tampa, Fla., who specializes in teaching management and not-for-profit accounting. Brian Butler (Brian@ConsultVistra.com) is the president and CEO of Vistra Communications, a public relations and marketing agency in Tampa.

To comment on this article or to suggest an idea for another article, contact Sally P. Schreiber, senior editor, at sschreiber@aicpa.org or 919-402-4828.


 

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Texas Court Halts Implementation of New Overtime Regulations

Posted By Unemployment Services Trust (UST), Wednesday, December 7, 2016

On May 23, 2016, the Department of Labor (DOL) issued updated regulations regarding the white collar exemptions to the Fair Labor Standards Act (FLSA) overtime requirements. The updated regulations, which were originally scheduled to take effect on December 1, 2016, would more than double the minimum salary requirement from $23,660 to $47,476 for certain executive, administrative, and professional employees in order to be exempt from overtime.

This past September a group of 21 states, led by Texas and Nevada, filed a lawsuit in the U.S. District Court for the Eastern District of Texas challenging the updated regulations, arguing that the DOL did not have the authority to require that employers offer overtime to workers who earn below a certain amount. This suit was consolidated with another suit brought by the U.S. Chamber of Commerce and other business groups also challenging the regulations.

On November 22, 2016, U.S. District Court Judge Amos Mazzant granted an Emergency Motion for Preliminary Injunction, which had been filed by the plaintiff states. The preliminary injunction blocks the DOL from implementing and enforcing the new regulations. Employers should note that this is only a temporary injunction, not a permanent one. The injunction applies nationwide and simply prevents the regulations from going into effect on December 1.

Once again, as this is a preliminary injunction, Judge Mazzant will be making a final decision on the actual merits of the case in the near future. If the decision goes against the DOL, we expect them to appeal to the U.S. Court of Appeals for the Fifth Circuit, so it’s likely that employers and regulators will be revisiting the regulations in the future.

Impact on Employers

For many employers, this is a welcome, albeit temporary reprieve. As a result, employers that have not made the necessary changes to their compensation plans have more time to plan for the changes in the event the regulations are upheld. Employers should not assume that the overtime rule is permanently cancelled.

  • Those employers that have already made changes to their compensation plans and have communicated those changes to their employees will most likely choose to leave those changes in place.
  • Employers that were struggling with making changes by either reclassifying employees to nonexempt overtime-eligible status or raising compensation to the proposed threshold in order to maintain exemption should consider to weigh their options pending future legal developments.
  • Employers that are considering rolling back any changes previously communicated should carefully review the potential employee relations issues that the change in direction may cause.

These decisions should be made in accordance with any applicable state or local laws. Employers should consult their employment attorney to determine what course of action is best for them.

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Cajun Santa Christmas Wants to Help You This Holiday Season!

Posted By Tasha L. Cooper, Louisiana Association of Nonprofit Organizations, Tuesday, December 6, 2016

Cajun Santa Christmas is a collective of campaigns put on by local nonprofits designed to aid flood victims over the holidays.  If any of the nonprofits within LANO are driving a campaign through the holiday season that benefits flood victims in some way, from sheet rock to electric blankets to gifts for children, we invite them to add their campaign to our page. Please visit the link below for additional information.

 

http://www.cajunrelief.com/campaigns/cajunsantachristmas/

 

Please contact Melissa Adair with the Cajun Relief Foundation at melissa.adair@gaudet.media.

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Register Now! December 8th Webinar with Retention Fundraising Expert

Posted By Amy Warner, CausePlanet, Tuesday, December 6, 2016

 

 

Last Chance to Register: Keep your donors while you can

 

Why let one more hard-won donor leak through the bucket when instead, she could be a lifetime supporter of your organization? Building good relationships is essential to retaining donors but knowing how isn’t always easy.

Thanks to a study of more than 250 organizations, Craver and his collaborators have introduced a framework for boosting retention and the lifetime value of donors. He addresses the fundraiser’s focus on what matters most to donors, how to respond efficiently to them and how to overthrow retention barriers.

From what drives donors to stay to what prompts them to leave, Craver makes it impossible to look the other way on retention--and your nonprofit will be better for it.

 

Webinar with Roger Craver

 

Join CausePlanet founder Denise McMahan and Roger Craver Thursday, December 8, at 11:00 Central Time for a webinar interview at your desk.

 

Craver will touch on the following topics:

 

               Why retention is important

               Why donors leave

               How to measure retention

               7 key drivers of donor commitment

               Barriers to retention

               Easy retention wins

 

Register

 

Register now for this FREE interview for all LANO members. (The link requires LANO network sign-in to register.)

 

See more

 

See more with the Page to Practicesummary of Craver’s book:

·      Simply log in at the top right corner of CausePlanet’s home page (www.causeplanet.org) and fill in your registered email with LANO and “Password1”.

·      Click on “Summary Library” to see Retention Fundraising and more titles.

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5 Things You May Not Know About Form 990

Posted By Don Engler, Wegmann Dazet & Company, Friday, December 2, 2016

With over 300 pages of instructions and 300 possible questions to answer, the IRS Form 990, Return of Organization Exempt From Income Tax is a complex and extensive form. It is filed annually by most exempt organizations, including charities. Here are five things you may not know or may have forgotten about Form 990:   

  1. It is a misnomer to call Form 990 an “income tax return.” There is no income tax calculation in the core Form 990 or within any of the accompanying schedules. The fact that it is not an income tax return becomes very important when attempting to apply the Internal Revenue Code to the filing of Form 990. Generally, where the Internal Revenue Code and the related regulations only reference an “income tax return,” the code or regulation in question will not normally apply to Form 990. It is very important, however, to remember that organizations subject to unrelated business income taxes (UBIT) file a separate Form 990-T, Exempt Organization Business Income Tax Return, which can be subject to the Internal Revenue Code and the regulations related to the filing of an income tax return.
  2. There are 16 possible schedules that can be attached to the core Form 990. These schedules run the gamut from Schedule A, which is a required attachment for all Section 501(c)(3) organizations, to Schedule R that reports related entities, certain transactions with related entities, as well as certain unrelated partnerships. There is a schedule for foreign activities as well as for hospitals (Schedules F and H, respectively). There is, however, only one schedule that must be attached to every Form 990 that is filed: Schedule O, which is used to report required and supplemental information to the form.
  3.  Some organizations get tripped up on reporting of lobbying expenses. Lobbying expenses are those amounts paid for activities intended to influence legislation, be it foreign, national, state or local. The IRS makes the distinction between direct lobbying and grassroots lobbying. Direct lobbying applies to instances in which organizations attempt to influence legislators. Grassroots lobbying is when the organization attempts to influence legislation through influencing the general public, such as urging supporters to contact legislators with a position on specific legislation. Lobbying expenditures are reported within the Statement of Functional Expenses on Line 11d on the core form. However, not all lobbying expenditures are to be reported on this line. Salaries paid to an employee of the filing where the employee is engaged in lobbying is not to be reported on 11d.  Section 501(c) organizations and Section 527 organizations are subject to limitations on lobbying and use Schedule C to furnish additional information.
  4. Your organization is being watched. Form 990 is heavily scrutinized, not only by the IRS, but also by state regulatory entities that use it to investigate exempt organizations operating in their states. In over 40 states, Form 990 is filed as part of the charitable fundraising registration process. In addition, the form is made widely available and used by charitable rating agencies. Readers have various motives for looking at the form, so it is important to look at it with an eye toward how all potential readers will react to the information being presented.
  5. In many instances, you cannot just check a box and be done. It is vital to read the instructions carefully. To give just one example, consider Section B of Part VII of Form 990, in which organizations report the five highest compensated independent contractors. The compensation to report is not limited to those contractors receiving a Form 1099 from the filing organization. You must report in Section B the top five that were paid more than $100,000 for services (not purchases of tangible personal property or rental or real property) rendered to the organization regardless of the need to prepare a Form 1099 for the service provider. The measurement date for the $100,000 is for the year ending within the year being filed. In other words, a June 30, 2016 fiscal year-end organization should look to the payments for services made during the year ending Dec. 31, 2015.

 

- See more at: http://blog.aicpa.org/2016/12/5-things-you-may-not-know-about-irs-form-990.html#sthash.ToJ8mQfo.dpuf

Tags:  990  IRS 

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Changes to Out-of-State Sales & Use Taxes

Posted By Faulk & Winkler, Monday, November 28, 2016

Louisiana law requires that you report out-of-state purchases on your Louisiana income tax for collecting sales tax. This is referred to as Use Tax. Effective July 1, 2017, Louisiana will require that a "remote retailer" or "dealer" who is not otherwise required to collect tax from Louisiana customers to provide a list of the names and addresses of any Louisiana customer whose purchases exceed $250 during a year. This new reporting requirement only applies to dealers who have sales of at least $50,000 in Louisiana during the year (including affiliates). This will apply to large online retailers like Amazon.

 

The seller must provide each applicable purchaser with an annual statement recapping total purchases in a year by Jan. 31 of the following year. This communication may be through email. By March 1 the seller must provide a list of the names and addresses of the applicable purchasers to the state. The list will only contain totals and will not be itemized in any way (i.e.: the state will not know what you purchased, just the total amount).

 

Although commonly ignored, Use Tax is not a new tax. This new reporting requirement is designed to increase collection efforts for the state by providing information on the amount purchased from out-of-state vendors where sales tax was not collected. However, some retailers may contest this law in court and how the state plans to enforce it remains an open question.

 

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Register Now! Webinar with Fundraising Retention Expert on Dec 8

Posted By Denise McMahan, CausePlanet, Monday, November 28, 2016

 

 

Why let one more hard-won donor leak through the bucket when instead, she could be a lifetime supporter of your organization? Building good relationships is essential to retaining donors but knowing how isn’t always easy.

 

Thanks to a study of more than 250 organizations, Craver and his collaborators have introduced a framework for boosting retention and the lifetime value of donors. He addresses the fundraiser’s focus on what matters most to donors, how to respond efficiently to them and how to overthrow retention barriers.

 

From what drives donors to stay to what prompts them to leave, Craver makes it impossible to look the other way on retention--and your nonprofit will be better for it.

 

Webinar with Retention Expert and Author Roger Craver

 

Join CausePlanet founder Denise McMahan and Roger Craver Thursday, December 8, at 11:00 Central Time for a webinar interview at your desk.

 

Craver will touch on the following topics:

 

   Why retention is important

   Why donors leave

   How to measure retention

   7 key drivers of donor commitment

   Barriers to retention

   Easy retention wins

 

Register

 

Register now for this FREE interview for all LANO members. (The link requires LANO network sign-in to register.) Or you can cut and paste this link: https://cc.readytalk.com/r/rpi0dh1w6i43&eom

 

See more with the Page to Practicesummary of Craver’s book:

 

· Simply log in at the top right corner of CausePlanet’s home page (www.causeplanet.org) and fill in your registered email with LANO and “Password1”.

 

· Click on “Summary Library” to see Retention Fundraising and more titles.

 

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Fundraising workshop: Grantwriting for Beginners

Posted By Nora Ellertsen, The Funding Seed, LLC, Monday, November 28, 2016

Grantwriting for Beginners
Tuesday, December 13, 9:00 a.m. - 12:00 p.m.
Ashe Cultural Arts Center
1712 Oretha Castle Haley Blvd., New Orleans
Details and registration

 

Are you involved with a nonprofit?  
Does your job require you to raise funds for your department or position?  
Do you want to add a valuable skill to your resume? 

Consider grantwriting!

Grantwriting for Beginners is an engaging workshop that gives you the basic tools you need to start writing grants.  Participants will learn how to find funding opportunities, tools and tips for writing proposals and ways to make a program competitive for repeat funding.


Attendees will receive a certificate of participation after completing the workshop.


Registration $40 per person.  Discounts available for students, AmeriCorps members and organizations registering two or more people.


For more on workshops and other services from The Funding Seed, visit www.thefundingseed.com.  Email info@thefundingseed.com to inquire about discount codes or to reserve your space and pay at the door.

Tags:  development  fund  fund development  fund raising  funding  Fundraising  funds  grant  grant writing  grants  grantwriting  louisiana  Member Event  New Orleans  nonprofit  nonprofit sector  non-profits  sustainability  training  workshop  workshop. grants 

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Breaking News - Texas Federal District Judge blocks Obama overtime rule

Posted By Tasha L. Cooper, Louisiana Association of Nonprofit Organizations, Wednesday, November 23, 2016

Late on Tuesday, a federal district judge in Texas issued a preliminary injunction blocking implementation of the Overtime Final Rule, ruling that the U.S. Department of Labor exceeded its authority. Barring a last-minute appeal, the overtime rule will not go into effect as scheduled on December 1 because of this decision.

 

At issue is the question of which employees qualify for an exemption from the requirement under the federal Fair Labor Standards Act (FLSA) that most employees are entitled to time and a half overtime pay for work in excess of 40 hours in a week. The FLSA exempts from the overtime requirement “any employee employed in a bona fide executive, administrative, or professional capacity,” often called the EAP or “white collar” employees. Current regulations require that employees must possess the duties of executives, administrative workers, or professionals and be paid more than a minimum salary. The overtime rule published by the Labor Department in May, and set to go into effect on December 1, would have more than doubled the existing “salary level test” for exempt white collar employees from $455 per week ($23,660 per year) to $913 per week ($47,476 per year).

 

Twenty-one Governors and Attorneys General filed suit in federal court challenging the overtime rule on several grounds. Siding with the states, Federal Judge Amos Mazzant held that the white collar exemption is clearly based on the duties that individual employees perform, and that the Labor Department did not have the authority to create a different or higher standard. Specifically, he ruled: “Congress gave the Department the authority to define what type of duties qualify [for the overtime exemption] — it did not give the Department the authority to supplant the duties test and establish a salary test that causes bona fide EAP’s to suddenly lose their exemption ‘irrespective of their job duties and responsibilities.’”

 

The judge issued a nationwide preliminary injunction. The Department of Labor is expected to appeal the decision, meaning that injunction could be lifted and the overtime rule put in place in a matter of weeks or months. 

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