Does the New Overtime Rule Really Affect Nonprofits and Organizers?

overtimeNew Orleans     Randy Shaw, the executive director of the Tenderloin Housing Clinic and its burgeoning empire, first challenged me to think about whether the new FLSA overtime guidelines would prevent any future prospects of building a farmworkers’ movement or an ACORN, both of which famously focused on building an army of volunteer and professional organizers working “long hours at low pay,” as ACORN advertised for years. The new overtime rules, long overdue, as more and more people are realizing, double the level of eligibility for overtime from a 2004-floor of a bit over $23,000 per year to the mid-$47000 range. On organizing programs that are not easily shoehorned into a 40-hour grid, such a jump seems like a huge budget buster and dream crusher. Both the US Public Interest Research Group, the Nader-created group of researchers and students, and Judicial Watch on the right had both expressed fears of the new rules impact and how it would hurt their work.

Looking into this all more carefully and going back to the basics, I remembered our many tussles with the fine men and women of the Department of Labor’s Wage and Hour Division, an understaffed and overworked group, I mean this seriously, the likes of which has few parallels in government. At different times we were able to establish organizers as discretionary employees and therefore properly salaried, which still maintains. I also remembered once on a Local 100 review shaking the investigators hand as he left, having concluded in the mid-1980s that we were not involved in sufficient interstate commerce. To make the story shorter, I finally shook myself back from my stupor and went back to the basics.

At one level, the gross expenditures to establish coverage under the Fair Labor Standards Act (FLSA) is $500,000, so a huge number of nonprofits in general and organizing efforts in specific are far under that number and face years of work to have any worries in this regard. More importantly, a DOL Wage & Hours circular dated as recently as August 2015 reminds one and all that nonprofit organizations existing for charitable, education, and similar purposes are in fact exempt from coverage of the FLSA and that this is a long settled matter in the courts as well. The circular importantly for membership-based organizations like ACORN and the original UFWOC, says that dues, gifts, donations, and the like are NOT counted at establishing the gross revenues, and in ACORN’s case those were the revenues period. Furthermore, the coverage threshold is established by commercial activity, and the DOL is clear that a nonprofit can also separate out the workers and revenue involved in any sales or commercial work so that only those workers are under the FLSA. The same separation can be done for any individual staff involved in regular interstate commerce like phone calls and travel between states.

So, why did ACORN worry about these issues for its organizers? First, ACORN was a complicated organization as any look at the more than 130 “banned by Congress” list would establish, yet we operated under one organization-wide salary and seniority schedule, so the mix-and-match would have diluted that solidarity of mission and commitment. Secondly, we were involved in hundreds of living wage fights, and the “optics” were sometimes issues, including the one legal test where we challenged the coverage in California. It was easier to raise the minimum of our scale in 2004 at the last FLSA adjustment on overtime to over the threshold and more clearly differentiate hours for non-field staff. Nonetheless, that doesn’t change the fact that we believed under the FLSA, like all other similarly situated nonprofits that we were legally exempt, and we threw in arguments over freedom of speech and association into the mix as well.

Why are the US PIRG and Judicial Watch worried? Obviously, I can’t be sure. The PIRGs contract a lot of their fundraising to a for-profit, which may have been part of their concern. Judicial Watch is a unit of other conservative operations to the best of my knowledge, so there might be issues that are not immediately obvious. For the most part though, if they were willing to take the heat, they could still cook the same way even in the new kitchen.

So in short, yes, a farmworkers movement could be built again under FLSA with the additional argument I believe still exists that all of its $5 per day and room and board were volunteers under the FLSA guidance, and an ACORN could also be organized again. The obstacles to doing so are many and mountainous, but they are not the FLSA or the new overtime rules.

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How Critical is “Future Flow” to Labor Unions?

New Orleans    Senator Mark Rubio of Florida cautions that there may be much work to be done on a new immigration bill, but I really wonder if that actually means that he is not ready to slip from attention yet or is trying to drag a potential bill down with some of his own issues?  Optimism broke out when the Chamber of Commerce and the AFL-CIO seemed to come to some tentative agreements on “future flow” of immigrant workers into the United States.  Future flow refers to the number of visas that will be given annually to guest workers.  Classically, business wants more cheap labor, while labor resists pushing down more skilled wage rates by allowing too many foreign workers into the country.   This disagreement was critical to killing the bill proposed by Arizona’s Senator John McCain and others during the Bush Administration.

This is a classic issue between business and labor, but I wonder how much it is really a contemporary economic concern, especially for the declining membership of unions?

On the lower wage side of union membership, the United Farmworkers, who potentially would be most impacted by temporary visas for additional farm labor hearkening back to the bracero program years ago, have indicated for years their willingness to make a deal in this area.  The Service Employees, although not a member of the AFL-CIO, is at the table with Secretary-Treasurer Eliseo Medina, a former immigrant farmworker and UFW organizer in his youth, and SEIU has been a leader in advocating for immigration reform even though theoretically its lower wage janitors, landscapers, and others would feel the most wage pressure from lower paid, temporary foreign workers.  Many immigrant workers dominate the home construction industry and there is always hue and cry from construction unions about these kinds of issues, but in reality there is little job competition or wage pressure in the downtown, big development construction projects where unions still have density.

Furthermore, other than the increasingly, politically marginalized agricultural interests, the big drool for more visas comes from the high tech industry and its hopes of raiding top flight software engineers and other geeks from around the world.  None of these companies, aside from some legacy plant workers for Xerox, are arguably union, so more tech visas is not something that labor is going to care about much.

Reports indicate that the sugar in the deal for labor was raising the minimum wages of visa workers so that a higher floor was set.  This is a smart move!  Given that we can no longer pretend, as our membership numbers plummet, that we are really protecting members as opposed to just being a cranky, old uncle advocate, by raising the minimum wage standards, we both protect UFW and other unions and help whatever members we have left by giving our unions more leverage at the bargaining table to push up wages by arguing about compression coming from visa workers.

Finally taking a deep drink of reality, rather than having the vapors from our own nostalgia, may have allowed labor to make a good deal on immigration reform, and this is a good thing!

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