If an enterprise is covered, all employees of the enterprise are also covered. The following types of employers are covered by the FLSA:
- A hospital, residential medical or nursing care for older adults or people with disabilities, a school or preschool, or a government agency; or
- An employer with an annual dollar volume of sales or business of at least $500,000 and that has at least two employees.
Enterprise coverage and nonprofits
Nonprofit organizations that ordinarily engage in commercial activities resulting in sales or business are covered by the FLSA. DOL considers whether their commercial activities compete with other for-profit businesses. For example, a nonprofit that sells goods at a gift shop, or a nonprofit that charges a fee for mental health counseling services, may be competing with for-profit businesses.
However, revenue that furthers charitable activities is not considered when determining whether an organization is covered as an enterprise. Such revenues may include cash and in-kind donations, membership dues, and more.
Employees not covered by the FLSA on an enterprise basis are likely still covered if they are:
- Domestic workers, including housekeepers, full-time babysitters, and cooks.
- Regularly engaged in interstate commerce or in the production of goods for interstate commerce.
"Interstate commerce" includes regularly:
- making or receiving out-of-state telephone calls;
- receiving or sending interstate mail or electronic communications;
- ordering or receiving goods from out-of-state suppliers;
- handling credit card transactions or performing the accounting or bookkeeping for such activities;
- producing goods that will be sent out-of-state;
- traveling to other states for work; or
- janitorial work in buildings where goods are produced for shipment outside the state.
Individual Coverage and Nonprofits
Individual coverage is based on the regular work activities of particular employees and whether or not they meet the definition of interstate commerce. For example, an office manager who routinely sends e-mails to out-of state suppliers to purchase office materials and equipment would be indivdually covered even if the organization is not covered as an enterprise.
A volunteer usually is not considered an employee for purposes of the FLSA if the individual volunteers time to religious, charitable, or other nonprofit organizations as a public service. Generally, individuals may not volunteer in commercial activities run by a nonprofit organization.
Typically, volunteers serve on a part-time basis and do not displace regular employees. Paid nonprofit employees cannot volunteer to provide the same type of services they are normally employed to provide.
Additional Resources for Nonprofits