HTML Preview Nonprofit Fact page number 1.
U.S. Department of Labor
Wage and Hour Division
(August 2015)
Fact Sheet #14A: Non-Profit Organizations and the Fair Labor Standards
Act (FLSA)
This fact sheet provides general information about how the FLSA applies to non-profit
organizations. The FLSA is the Federal law which sets minimum wage, overtime,
recordkeeping, and child labor standards. There are two ways in which an employee can
be covered by the law and therefore entitled to its protections: "enterprise coverage" and
"individual coverage."
Enterprise Coverage
The FLSA gen
erally applies to (“covers”) employees employed by businesses with annual
gross volume of sales made or business done of at least $500,000. Non-profit charitable
organizations are not covered enterprises under the FLSA unless they engage in ordinary
commercial activities that result in sales made or business done, such as operating a gift
shop or providing veterinary services for a fee.
In determining whether or not a non-profit organization is a covered enterprise, the Wage
and Hour Division will consider only activities performed for a business purpose.
Charitable, religious, educational, or similar activities of organizations operated on a non-
profit basis where such activities are not in substantial competition with other businesses
do not result in the organizations being considered covered enterprises. For a non-profit
organization, enterprise coverage applies only to the activities performed for a business
purpose; it does not extend to the organization’s charitable activities.
Income from contributions, membership fees, dues (except any part which represents the
value of a benefit, other than of token value, received by the payer), and donations (cash
o
r non-cash), used in the furtherance of charitable activities, are not considered in
determining whether an organization has met the dollar threshold required for FLSA
en
terprise coverage. See Fact Sheet 14: Coverage Under the Fair Labor Standards Act
(FLSA) for additional information about enterprise coverage.
For example, a
non-profit animal shelter provides free veterinary care, adoption services,
and shelter for homeless animals (charitable activities). In addition, the shelter provides
veterinary care for a fee to customers (commercial activities). If the revenue generated
from the organization’s commercial activities is at least $500,000 in a year, the employees
engaged in the commercial activities are protected by the FLSA on an enterprise basis.
Employees of the organization’s charitable activities are not covered on an enterprise
basis since those activities do not have a business purpose.
FS 14A