“We’re a nonprofit” is not an answer to an overtime question

Often no, nonprofit case managers are not exempt. Working for a nonprofit does not, by itself, take you outside the federal overtime law, and many salaried case managers at nonprofits are labeled exempt even though their actual duties do not meet the tests.

The three tests

An employer that calls you “exempt” generally has to prove all three:

1. Salary basis. A fixed salary that does not drop when you work less. See salary versus hourly pay.
2. Salary level. At least $684 per week, or $35,568 a year. The 2024 rule was vacated (E.D. Tex. Nov. 15, 2024), and the Labor Department formally reinstated the 2019 figures effective May 15, 2026.
3. Duties. Your primary duty must fit one of the white-collar exemptions, usually the administrative or learned professional exemption.

Nonprofits are covered more often than people think

There are two ways the Fair Labor Standards Act can reach you.

Enterprise coverage (29 U.S.C. § 203(r)(2)(A) and (s)(1)(B)). The law names certain institutions as covered enterprises “regardless of whether or not such hospital, institution, or school is public or private or operated for profit or not for profit.” The list includes hospitals; institutions “primarily engaged in the care of the sick, the aged, or the mentally ill or defective who reside on the premises”; schools for children with disabilities or gifted children; preschools; elementary and secondary schools; and colleges. Group homes, residential treatment centers and similar residential programs can fall in this group.

Business-purpose activities. Other nonprofits are covered for activities performed for a business purpose. The Labor Department’s Fact Sheet #14A says a nonprofit is covered when it engages in “ordinary commercial activities” with an “annual gross volume of sales made or business done of at least $500,000.” Donations and dues used for charitable work do not count toward that figure. Whether a particular program counts as business activity depends on what the organization does and how it is paid.

Individual coverage. Even if the employer is not a covered enterprise, you can be covered on your own if your work involves interstate commerce, such as “making/receiving interstate telephone calls” or sending materials to another state (Fact Sheet #14A).

The short version: “We’re a nonprofit” is not an answer. It is the start of a question.

The duties tests

Administrative (29 C.F.R. §§ 541.200–.203). The employer must show office work “directly related to the management or general business operations” of the organization and a primary duty that includes “the exercise of discretion and independent judgment” on matters of significance. The rules say that is more than “applying well-established techniques, procedures or specific standards described in manuals or other sources.” Case managers who carry out programs under funder rules, agency policy and supervisor approval are usually delivering the organization’s services, not running it. See the administrative exemption.

Learned professional (29 C.F.R. §§ 541.300–.301). This requires “advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction.” Fact Sheet #17D limits it to professions where “specialized academic training is a standard prerequisite for entrance into the profession.” When a case manager job accepts a bachelor’s degree in social work, psychology, human services or a “related field,” the regulation points the other way: the exemption does not cover jobs that can be done “with only the general knowledge acquired by an academic degree in any field.” A social work degree is not automatically the kind of degree this exemption requires. See the learned professional exemption.

Usually points to non-exempt (overtime owed)

• Carrying a caseload and meeting required contact schedules
• Intake, eligibility screening and assessments using set tools
• Referring clients and arranging services
• Documenting to funder, Medicaid or contract standards
• Getting supervisor approval for exceptions
• A job open to bachelor’s degrees in several fields

Can point toward exempt

• Setting organizational policy or strategy
• Managing grants or budgets with real authority
• Final decisions that bind the organization without review
• Supervising two or more full-time staff (see the executive exemption)
• A job that truly requires a specific advanced degree and license
• Providing licensed clinical therapy as the main job

Mission-driven work, real hours

Nonprofit case managers often stay late because clients need them. That commitment does not erase the law. If you are misclassified, the hours past 40 may be owed at time-and-a-half, whether you worked them at the office, in the field or at home finishing notes. Related pages: case managers, care coordinators and utilization review.

If you work in Texas

No Texas statute requires a private employer to pay overtime, so for a Texas nonprofit case manager this is a federal claim under the FLSA. A colleague doing the same job in another state may also have a state wage claim with its own limitations period and damages. The federal remedy is the unpaid overtime premium plus an equal additional amount as liquidated damages, with the employer paying your attorney’s fees and costs if you prevail. The period reaches two years back from the date of filing, or three years if the violation was willful; see the statute of limitations.

Common questions

My employer is a 501(c)(3). Do they have to pay overtime?

Often, yes. Hospitals, residential care institutions and schools are covered whether or not they are nonprofits. Other nonprofits are covered for business-type activities at the required size, and individual employees can be covered on their own.

I’m salaried and my title is “case manager.” Doesn’t that make me exempt?

No. Neither a salary nor a title decides it. Your actual main duties do.

I have a social work degree. Am I a “professional” who isn’t owed overtime?

Not automatically. The professional exemption applies only if the job truly requires a particular advanced degree and your main work uses it.

We’re always told the budget is tight. Can a nonprofit just not pay overtime?

Budget limits are not an exemption. If the law covers the job and no exemption fits, overtime is owed.

Can I be fired for asking?

Federal law prohibits retaliation against employees who complain about unpaid wages or join an overtime claim.

Where to file a complaint with an agency

• FLSA overtime rules, U.S. DOL Wage and Hour Division
• File a complaint with the Wage and Hour Division
• DOL Fact Sheet #14A, non-profit organizations and the FLSA
• Administrative exemption regulations, 29 C.F.R. §§ 541.200–541.204
• Professional exemption regulation, 29 C.F.R. § 541.301

Sources

1. 29 U.S.C. § 203(r)(2)(A); 29 U.S.C. § 203(s)(1)(B) (named institutions are covered enterprises “regardless of whether or not such hospital, institution, or school is public or private or operated for profit or not for profit”; institutions “primarily engaged in the care of the sick, the aged, or the mentally ill or defective who reside on the premises”).
2. U.S. Dep’t of Labor, Wage & Hour Div., Fact Sheet #14A (nonprofit coverage for “ordinary commercial activities” with an “annual gross volume of sales made or business done of at least $500,000”; donations and dues used for charitable activities excluded; individual coverage through “making/receiving interstate telephone calls”).
3. 29 C.F.R. § 541.200(a) (the three elements of the administrative exemption); 29 C.F.R. § 541.202(a), (e) (discretion and independent judgment must be more than the use of skill in applying “well-established techniques, procedures or specific standards described in manuals or other sources”); 29 C.F.R. § 541.704 (use of manuals).
4. 29 C.F.R. § 541.300(a); 29 C.F.R. § 541.301(a) (“advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction”).
5. 29 C.F.R. § 541.301(d) (the exemption does not reach occupations that “customarily may be performed with only the general knowledge acquired by an academic degree in any field”); U.S. Dep’t of Labor, Fact Sheet #17D (“specialized academic training is a standard prerequisite for entrance into the profession”).
6. 29 C.F.R. § 541.600(a) ($684 per week), as restored by 91 Fed. Reg. 27835 (May 15, 2026), after the 2024 salary-threshold rule was vacated (E.D. Tex. Nov. 15, 2024).
7. 29 C.F.R. § 541.2 (a job title does not determine exempt status); 29 C.F.R. § 541.700 (primary duty); 29 C.F.R. § 541.100(a)(3) (the executive exemption requires customarily and regularly directing the work of two or more other full-time employees).
8. 29 U.S.C. § 207(a)(1) (overtime); 29 U.S.C. § 215(a)(3) (retaliation); 29 U.S.C. § 216(b) (liquidated damages, fees and costs); 29 U.S.C. § 255(a) (two- and three-year periods).

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Attorney responsible: Jack L. Siegel, Dallas, Texas.