Who this is for: Salaried case managers, coordinators, caseworkers, and program staff at nonprofit agencies who work past 40 hours and get no overtime.

What's going on: The agency says nonprofits don't have to pay overtime, or that your job is "exempt."

What you can do: Check two things: whether the FLSA covers you, and whether your job passes a duties test. Then ask how many coworkers do the same job.

Nonprofits usually have to pay overtime: being a nonprofit does not exempt an employer from the FLSA, and the "exempt" label belongs to the job, not the employer.

The short answer: the exemption belongs to the job, not the employer

The Fair Labor Standards Act requires time-and-a-half for every hour over 40 in a week.¹ There is no carve-out for charities. Two questions decide it. Does the FLSA cover the agency, or you? And does your job fit an exemption? Nonprofit status only touches the first.

The second question turns on salary and duties. Your title doesn't settle it: "A job title alone is insufficient to establish the exempt status of an employee."² The employer has to prove the exemption by a preponderance of the evidence.³ Courts give exemptions a "fair reading".⁴

Which nonprofits the FLSA covers automatically

Congress named certain operations as covered whether or not they are run for profit.⁵ For those, the agency's tax status is irrelevant.

"We're a charity." When the $500,000 test matters, and when it doesn't

The Department of Labor's Fact Sheet 14A⁸ puts the rule this way: "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."

Read the end of that sentence again: not in substantial competition with other businesses. When a nonprofit sells services in a market where for-profit companies also compete, that activity counts. Whether Medicaid-funded case management counts toward the $500,000 test turns on the facts. The Department's guidance does not address Medicaid reimbursement; the question it poses is whether the activity is performed for a business purpose and is in substantial competition with other businesses.⁸ And if the agency runs a hospital, a residential program, or a school, the dollar test doesn't come into it.

Even if the agency isn't covered, you probably are

Coverage also attaches to the individual worker. Fact Sheet 14A says employees of a non-covered employer "may still be entitled to its protections if they are individually engaged in interstate commerce."⁸ The Department's examples are “making/receiving interstate telephone calls, shipping materials to another state, and transporting persons or property to another state,” and it “will not assert that an employee who on isolated occasions spends an insubstantial amount of time performing individually covered work is individually covered by the FLSA.”⁸

The jobs nonprofits misclassify again and again

• Case managers and targeted case managers
• Service and support coordinators (Medicaid waiver, I/DD)
• Foster care and child welfare caseworkers
• Social workers and caseworkers hired with a bachelor's in any social science
• Behavioral health case managers and community support staff
• Care coordinators
• Program, intake, and housing coordinators
• Benefits and housing navigators

These jobs share a pattern: assess the client, write the plan, line up services, document the contact, repeat. The Department of Labor has looked at that work and found no administrative exemption. In a 2007 opinion letter,⁹ about case managers at a service provider for people with disabilities, it concluded: "Case Managers employed by your client do not qualify for the administrative exemption under section 13(a)(1)."

"Mission work" is not a duties test

Agencies say the job is a calling. It is. That still isn't a test in the regulations.

The administrative exemption is for people who help run the business: finance, HR, compliance. It isn't for the people who deliver the service the agency exists to provide. The DOL found the case managers' work "more related to providing the Company's ongoing, day-to-day case management services for its consumers,"⁹ not running the business. See the administrative exemption.

And no, you can't "volunteer" the extra hours. Fact Sheet 14A: "paid employees of a non-profit organization cannot volunteer to provide the same type of services to their non-profit organization that they are employed to provide."⁸

Grant funding, Medicaid contracts, and tight budgets are not defenses

The FLSA has no hardship exception. An underfunded grant or a low Medicaid rate doesn't change what's owed. The agency chose the classification. It owns the result.

Under the FLSA you can recover unpaid overtime for two years back, three if the violation was willful,¹⁰ plus an equal amount in liquidated damages.¹¹ Some states allow more. See state overtime laws and how far back a claim reaches.

What a group case against a nonprofit looks like

Nonprofits hire case managers in groups, train them on one manual, hold them to one productivity standard, and classify them with one decision. That's what makes a collective action work: one job, one classification, one case.

Siegel Law Group has recovered more than $100 million for workers in federal overtime cases, including a $38.7 million class and collective settlement in Pruess v. Presbyterian Health Plan,¹² where the firm was lead counsel. Past results do not guarantee future outcomes.

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Questions we hear

Are 501(c)(3) organizations exempt from overtime?

No. Tax-exempt status under the Internal Revenue Code and coverage under the FLSA are separate questions. A 501(c)(3) that runs a hospital, a residential program, or a school is covered. One that sells services may be covered for that activity. Its employees may be covered individually either way.

Can my nonprofit give me comp time instead of overtime pay?

Not in place of overtime pay. The FLSA's comp-time provision¹³ is limited to public agencies.¹⁴ A private nonprofit pays cash.

I'm paid more than $684 a week. Doesn't that make me exempt?

No. The $684-a-week salary level¹⁵ is only a floor. The job also has to pass a duties test, and coordinating client services usually doesn't.

Keep reading

• Are social workers exempt?
• Service and support coordinators
• Foster care and child welfare caseworkers
• Behavioral health case managers
• Are nurses exempt from overtime?
• Am I misclassified as exempt? The 10-question check
• The 2026 exempt salary threshold
• No tax on overtime for salaried workers
• The learned professional exemption
• Got a notice about an overtime lawsuit?
• What an overtime lawyer costs
• Day-rate overtime: paid by the day isn't a salary
• Signed an arbitration agreement?
• How much is my overtime claim worth?
• Prior authorization nurses

Free, confidential case review: (214) 790-4454.

We take overtime cases on contingency. We advance the costs of the case, and if we recover, those costs are repaid out of the recovery. If we do not recover, you owe us nothing — no attorney's fee and no costs.

Notes

1. 29 U.S.C. § 207.
2. 29 C.F.R. § 541.2.
3. E.M.D. Sales, Inc. v. Carrera, 604 U.S. 45 (2025).
4. Encino Motorcars, LLC v. Navarro, 584 U.S. 79 (2018).
5. 29 U.S.C. § 203(r)(2)(A), (s)(1)(B).
6. 29 U.S.C. § 203(s)(1)(C); § 207(o). See 29 U.S.C. § 203(r), (s) (enterprise coverage).
7. 29 U.S.C. § 203(s)(1)(A); Fact Sheet 14A. See WHD Fact Sheet 14A: Non-Profit Organizations and the FLSA; 29 U.S.C. § 203(r), (s) (enterprise coverage).
8. Fact Sheet 14A. See WHD Fact Sheet 14A: Non-Profit Organizations and the FLSA.
9. DOL Op. Ltr. FLSA2007-7 (Feb. 8, 2007).
10. 29 U.S.C. § 255(a).
11. 29 U.S.C. § 216(b).
12. Pruess v. Presbyterian Health Plan (D.N.M.), final approval June 24, 2026.
13. 29 U.S.C. § 207(o).
14. 29 C.F.R. § 553.20.
15. 91 Fed. Reg. 27833.
16. 29 U.S.C. § 203(s)(1)(B).