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HR Management
June 18, 2021
While the nonprofit sector is dedicated to serving those in need, without encompassing diversity, equity, and inclusion (DEI) into their governance and operations, they risk...
Read MoreAboutDiversity, Equity, and Inclusion in Nonprofit Organizations
Nonprofit Management
June 14, 2021
With the rise of smartphones, social media and other digital channels, nonprofits now have more tools available to them for engaging donors than ever before.
Read MoreAboutFour Best Practices to Improve Donor Engagement
Nonprofit Management
May 27, 2021
Nonprofits across the country were forced to pause, pivot and make remarkable changes to their in-person events last year due to the unprecedented circumstances of COVID-19....
Read MoreAbout2021 Virtual Event Best Practice Tips
Nonprofit Management
April 16, 2021
In today’s talent-based economy, an organization’s workforce is one of its most important tangible assets. Despite its importance, this asset is often not carefully planned,...
Read MoreAboutA Workforce Strategy Designed to Help Push Your Nonprofit Forward
Nonprofit Management
December 18, 2020
This year, UST has been busy creating a plethora of timely and relevant resources designed specifically to help the nonprofit sector navigate the many unknowns presented by ...
Read MoreAboutUST's Most Popular 2020 Content
Nonprofit Management
December 02, 2020
This short 30-minute on-demand webinar features tools and resources that can help nonprofit employers streamline HR processes and stay compliant with state and federal regul...
Read MoreAbout[Webinar Recording] Supporting Nonprofit Sustainability During a Crisis
Nonprofit Management
November 04, 2020
As we continue social-distancing—heavily relying on virtual resources—large-scale events have taken on a whole new look and feel.
Read MoreAbout2020 Virtual Event Best Practice Tips
Nonprofit Management
October 15, 2020
UST's latest interactive webinar series, "UST Live," brings the collective expertise of reputable nonprofit leaders to you—live&#x2014...
Read MoreAbout[Webinar Recording] UST Live: Developing a Sustainable Strategy for 2021
Nonprofit Management
April 03, 2020
While in the midst of a global emergency, the current COVID-19 pandemic, nonprofits are challenged with how to successfully continue managing their mission-driven brand.
Read MoreAboutHow to Manage Your Brand During a Global Emergency
Nonprofit Management
March 12, 2020
Capacity building is an investment in the effectiveness and future sustainability of your nonprofit organization–does your nonprofit have the ability to deliver a...
Read MoreAboutThe Benefits of Nonprofit Capacity Building
Nonprofit Management
February 20, 2020
Social media continues to prove to be an essential part of a nonprofit’s marketing strategy. A key benefit of social media is that it offers new forms of communication and t...
Read MoreAboutFive Steps to Achieve Social Media Capital for Your Nonprofit
Nonprofit Management
January 29, 2020
When marketing in the nonprofit sector, it can be a difficult road to navigate. With more than a million nonprofit organizations registered in the U.S., it can be challengin...
Read MoreAboutFive Obstacles Marketers Encounter in the Nonprofit Sector
Nonprofit Management
December 10, 2019
It’s that time of year again when we can expect to experience some inclement weather conditions across the states. When severe weather interferes with the day-to-day operati...
Read MoreAboutWinter is Upon Us - Prepare your Nonprofit Now
Nonprofit Management
September 11, 2019
What is a KPI? A Key Performance Indicator (KPI) is “a measurable value that demonstrates how effectively a nonprofit (or another type of organization) is achieving its key ...
Read MoreAboutHow KPIs Benefit a Nonprofits Success

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HR Question: Reducing Pay Due to COVID-19

Question: Can we reduce pay because of an economic slowdown due to COVID-19?

Answer: You can reduce an employee’s rate of pay based on business or economic slowdown, provided that this is not done retroactively. For instance, if you give employees notice that their pay will change on the 10th, and your payroll period runs from the 1st through the 15th, make sure that their next check still reflects the higher rate of pay for the first 9 days of the payroll period.

Nonexempt employees (those entitled to overtime) - A nonexempt employee’s new rate of pay must still meet the applicable federal, state, or local minimum wage. Employees must be given notice of the change to their rate of pay, and some states require advance notice.

Exempt employees (those not entitled to overtime) - An exempt employee’s new salary must still be at or above the federal or state minimum for exempt employees. The federal minimum salary is $684 per week. Several states have weekly minimums that are higher than that (California and New York, for instance, are in the $1,000 per week range). The minimum may not be prorated based on hours worked.

Exempt employee reclassification - If an exempt employee has so little work to do that it does not make sense to pay them the federal or state minimum (or you simply cannot afford to), they can be reclassified as nonexempt and be paid by the hour instead. This must not be done on a very short-term basis. Although there are no hard and fast rules about how long you can reclassify someone, it is recommended that you don’t change their classification unless you expect the slowdown to last for more than three weeks. Changing them back and forth frequently could cause you to lose their exemption retroactively and potentially owe years of overtime.

Employees with contracts or CBAs - If employees have employment contracts or are subject to collective-bargaining agreements (CBAs), you should consult with an attorney before making any changes to pay.

Q&A provided by ThinkHR, powering the UST HR Workplace for nonprofit HR teams. Have HR questions? Sign your nonprofit up for a free 30-day trial here.

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Nonprofit Finance
April 23, 2021
According to the 2021 Benchmarks Report, the average nonprofit donor contributed an average of $167 in 2020—this per-donor metric was slightly lower than 2019.
Read MoreAboutOnline Fundraising Best Practices for the New Year (and Beyond)
Nonprofit Finance
December 18, 2019
Understanding the concept of the “business model” for your nonprofit has become a more integral component to maintaining organization sustainability within the nonprofit sec...
Read MoreAboutThe Importance of Understanding Your Nonprofit's Cash Flow
Nonprofit Finance
November 14, 2019
Last year, the Financial Accounting Standards Board (FASB) released Accounting Standards Update (ASU) 2018-08, which clarifies the accounting guidelines for contributions re...
Read MoreAbout[Webinar Recording] Accounting for Nonprofit Grants and Contributions
Nonprofit Finance
October 29, 2019
Giving in the U.S. in 2020 will be different in many ways than previously—mainly because of campaigns, economic conditions, and tax law implications. Don'...
Read MoreAbout[Webinar Recording] Trends and Forecasts for Charitable Giving
Nonprofit Finance
October 08, 2019
What is an executive director? An executive director is “responsible for overseeing the administration, the program and the strategic plan of a nonprofit organization. Other...
Read MoreAboutHow an Executive Director Becomes a Financial Leader
Nonprofit Finance
September 27, 2019
Thousands of nonprofits have registered with their states in order to legally solicit donations... do you know what state requirements extend to your organization?Presented ...
Read MoreAbout[Webinar Recording] Fundraising Registration 101
Nonprofit Finance
May 10, 2019
Are you familiar with the Accounting Standards Update (ASU) 2016-14 issued by FASB? It’s a standard created to offer solutions to simplify and improve how a nonprofit organi...
Read MoreAbout​​​​​​​Lessons Learned from Implementing ASU 2016-14 – Functional Expenses
Nonprofit Finance
May 01, 2019
Did you know that certain nonprofits can legally opt out of paying state unemployment taxes? Do you understand who is benefiting from this tax exemption law? In this article...
Read MoreAbout​​​​​​​The True Story of Nonprofits and Taxes
Nonprofit Finance
November 08, 2018
With holidays on the horizon, this is the time for holiday shopping, family gatherings and ringing in the New Year. With so much on our plates, time can get away from us&...
Read MoreAboutExercise Your Nonprofit’s Tax Exemption for 2019
Nonprofit Finance
August 01, 2018
UST releases 2018 UI toolkit to help nonprofit organizations better understand unemployment insurance options and claims management best practices. UST, a program dedicated ...
Read MoreAboutNonprofit Toolkit Offers the Top Guides for Managing Unemployment
Nonprofit Finance
July 13, 2018
UST is giving 532 nonprofits $3,869,249 in cash back for their ability to reduce their anticpiated unemployment claims within the year. UST, a program dedicated to providing...
Read MoreAboutNonprofits Receive Over $3.8 Million in Cash Back Through UST’s Claims Management Services
Nonprofit Finance
June 26, 2018
UST helps 501(c)(3)s lower their unemployment costs & maintain HR compliance, providing resources to help refocus on mission objectives. UST, a program dedicated to ...
Read MoreAboutUST Nonprofit Members Utilized Over $1.1 Million in Cloud-Based HR Resources
Nonprofit Finance
June 20, 2018
UST helps 501(c)(3)s lower their unemployment costs & maintain HR compliance, providing resources to help refocus on mission...
Read MoreAboutUST Uncovers $2.8 Million in Potential Unemployment Claims Savings for 135 Nonprofits
Nonprofit Finance
May 31, 2018
UST helps 501(c)(3)s lower their unemployment costs & maintain HR compliance, providing resources to help...
Read MoreAbout70 Nonprofits Choose UST as Their Primary Nonprofit Workforce Solution
Nonprofit Finance
May 03, 2018
In an Effort to Provide More Robust and Readily Accessible HR and Unemployment Resources to the Nonprofit Sector, UST Launches a New ...
Read MoreAboutUST Launches New Website to Unveil New Branding & Nonprofit Programs
Nonprofit Finance
August 17, 2017
Utilizing State-Specific Unemployment Claims Administrators, Who Help Protest Unemployment Claims and Attend 100
Read MoreAboutNonprofits Experience $27.8 Million in Unemployment Claims Savings With UST Program
Nonprofit Finance
October 08, 2016
Working on a restricted budget isn’t easy. But you can take some simple cost-cutting measures to free up some more dollars for your mission. Here are UST’s top 8:1. Get disc...
Read MoreAbout8 Simple Nonprofit Cost Cutting Ideas
Nonprofit Finance
August 15, 2016
Sometimes the hardest part of being a nonprofit isn’t fulfilling your organization's mission — sometimes it’s just making sure there are enough supplies f...
Read MoreAboutFree Resources for Nonprofits

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