Charities being sued for not paying overtime

A recent story in the Journal Gazette in Fort Wayne, IN discussed a case of a nonprofit worker at a Ronald McDonald House Charities of South Florida. The article relates that the employee worked seven days a week at the nonprofit charity that provides housing for sick children and their families during medical treatment. She regularly worked about 70 hours a week, and it turns out, is owed more than $20,000 in unpaid overtime for the job she left in April.

When she asked for some time off, and then to start clocking in and out , and her employer told her that she was not allowed to. She filed a lawsuit against the charity Sept. 10 in Miami federal court, alleging overtime violations under the Fair Labor Standards Act.

In the troubled economy, charities and nonprofits have been hit hard. Donations are down, staff has been cut, and some corners are being cut.

Michael Casey, managing partner of Epstein Becker & Green's Miami office, said major national nonprofits like the Boy Scouts of America and United Way run sophisticated operations similar to big corporations.

"The problem hits the smaller, local nonprofits just like it hits the smaller employers," he said. "The dismal economy has caused a lot of employers to fudge quite a bit on the wage-and-hour front. They will tell some employees, 'We can't afford the OT, but we need the work done.' The law says you can't do that."

The lawsuit against Ronald McDonald House was not filed on a whim. The Labor Department investigated Siberio's claim and determined her employer was a nonexempt charity violating the overtime provisions of the Fair Labor Standards Act, Scheve said.

"I can only remember a handful of nonprofits we have sued," he said.
"It's not that we target them," Scheve said. "It's just that they are an employer like everybody else. Just because they do something good doesn't mean they get a free pass."

Soraya Rivera-Moya, the executive director of Ronald McDonald House Charities of South Florida, declined to discuss the pending litigation. "We are focused on providing comfort and care to more than 50 families who stay at the Ronald McDonald Houses of South Florida every day."
In some ways, nonprofits are just mirroring other businesses.

A new Labor Department report said the rights many Americans have taken for granted - minimum wage, overtime pay, meal and bathroom breaks, access to workers compensation - are disappearing from the workplace.

The report looked at 4,387 workers in Los Angeles, New York and Chicago, and found 22 percent had suffered overtime abuses of some type in the previous week.

The Fair Labor Standards Act stipulates that covered employees must be paid time and a half for all hours worked over 40 in a week.

Nonprofits are prone to push this boundary, said Jennifer Chandler, director of network support at the National Council of Nonprofits in Washington.

"Even though they are mission-based and doing wonderful things in the community, they still have to follow the law," she said.

The Labor Department is cracking down on nonprofits, especially in the recession where nearly a third have cut staff and services, Chandler said.

Lawsuits by former employees also have increased. Read more here.