Federal Minimum Salary Increase: Is Your Nonprofit Prepared? 

     As you may know, and I hope you do, the federal minimum wage salary is set to increase twice in the coming months. First in July of 2024, and again in January of 2025. If you're not aware of what these requirements are, I encourage you to stop and look into this. If you have any individual making less than $44,000 in your organization, you need to really pay attention and make sure you’re familiar with this requirement. 

     Today,I want to talk specifically about how these changes, while designed to improve the standard of living for workers, are imposing huge financial challenges for nonprofits. Nonprofits operate on tight budgets, let's face it. This change in salary law is going to strain our budgets! The impact on nonprofits is significant. So, it's crucial that you not only understand how those changes will affect you, but that you also take steps to prepare for this change as you manage the resources in your budget.

3 Steps to Prepare Your Nonprofit for the Federal Minimum Salary Increase

1.  Review Your Budget

     First, you need to understand your current budget and look to see if there's some resources that you can allocate to increasing salaries. Are there any non-essentials that can be trimmed to make that possible? That's the first place to start. 

2.  Evaluate Your Staffing Needs

     The next step is to take a look at your staffing needs. You may have gotten away with having a full-time person and a part-time person running a certain program. You may need to move to two part-timers or one full-time only. Analyze your staffing structure to determine whether you need to make some critical adjustments to ensure you can pay these new wages and still operate your program.  Unfortunately, this is a time when many nonprofits will have to consider restructuring roles to make it all work.

3.  Ensure Compliance

     I mentioned it earlier, but if you don't understand these new laws or if you don't even understand the exemptions that have always pertained to paying individuals on a salary I want to encourage you to take some time to get more familiar with these laws. If you need a resource on this, I have a great one that I would love to share with you. Just contact me here for it. Noncompliance can lead to huge penalties and legal issues, and we all want to avoid that. 

     While the challenges may seem daunting, they ultimately present us with an opportunity to strengthen our organization and also increase wages of the average worker. By taking these proactive steps, you’ll not only remain compliant, but you’ll also stay financially stable and potentially find some ways to fulfill your mission even more effectively.

     If you need some guidance on navigating these challenges and their impact on your budget, I'm here to help! For additional resources, subscribe to my blog to receive tips like this each week in your inbox.   For more personalized help, schedule a consultation with me so we can talk about your specific needs together. I know that we can develop some strategies to help manage this transition smoothly and keep your nonprofit thriving!