Do Labor Laws Apply to Nonprofit Organizations?

The Fair Labor Standards Act is the primary federal labor law, and nonprofit organizations must obey the dictates of the FLSA in their relationships with their employees. Some states have also enacted additional labor laws that nonprofit organizations must follow. Nonprofits are only exempt from labor laws when they use volunteer labor.

The Fair Labor Standards Act is a federal law that establishes guidelines for employee-employer relationships. It prohibits child labor and mandates that employers pay overtime wages when non-exempt employees work more than 40 hours in a week. The law also establishes a federal minimum wage -- $7.25 per hour as of 2013. States may establish higher minimum wages that employers must honor. The law also requires that employers display a poster somewhere in the workplace outlining the requirements of the FLSA and provide employees with a number to call if they believe their rights have been violated.

Both federal and state laws prohibit discrimination, and this includes nonprofit organizations. Employers can't change hiring criteria or fire employees based on their membership in a protected class. Protected classes include race, religion, sex, national origin, disability status and age. Employers also can't set up barriers that make it impossible for members of a certain class to do a job they're capable of doing. For example, requiring that an office employee be able to do 20 jumping jacks could be a form of disability discrimination because it prevents people with physical disabilities from getting a job for which they would otherwise qualify.

States can enact their own labor laws, and state laws trump federal laws when they provide additional protection to employees. For example, in California, employees are permitted a paid 10-minute break for every four hours they work. States can offer exemptions to nonprofit organizations, but cannot allow nonprofit organizations to violate federal laws.

Many nonprofits enlist the assistance of volunteers, and volunteers don't have to be paid according to labor laws. However, a volunteer is employed in a voluntary position, so nonprofits can't force volunteers to work longer hours than they want to work. Similarly, nonprofits must still follow state safety regulations, so they can't deliberately or negligently endanger volunteers.