CEO Notebook

Knowing NBOA members, I’m guessing you’ve heard about the new FLSA overtime rules that were approved in late April. NBOA staff has been fielding questions right and left, and we have resources to help you navigate those changes — including a just-in-time webinar in conjunction with NAIS for all NBOA and NAIS members on Thursday of this week (more on that later). But what you may not know is how NBOA and other independent school associations have invested time and resources to advocate for our schools, so that the realities of independent school business, in support of our schools’ nonprofit missions, are clear to those interpreting laws and making regulations.

First, I want to start with our big win earlier this year. In 2022, multiple cases in different regions of the U.S. ruled that independent schools were subject to Title IX simply because of their tax-exempt status. Several independent school associations dedicated significant time and resources to appealing the ruling, and we also co-signed on proposed legislation, “Safeguarding Charity Act," to ensure no court takes us down this road in the future. In March, the U.S. Court of Appeals for the Fourth Circuit reversed a 2022 ruling that an independent school's 501(c)(3) tax-exempt status constitutes federal financial assistance, clarifying that tax-exempt status does not make a school a recipient of federal financial assistance under Title IX or other federal laws. This is a huge relief, not only for our schools, but for all nonprofits across the board, which are taking steps to make their communities fair and equitable without diverting resources to compliance regimes designed for much larger institutions.

Since we are such a small school, this does have a big impact on us and would likely affect ALL additional employees we will hire who are non-faculty.

When the Department of Labor announced updates to FLSA overtime rules last fall, we also advocated for adjustments to the proposal, which I wrote about in a September CEO Notebook. As we have done many times previously when proposed legislation is released that may impact independent schools, we partnered with NAIS to issue a joint comment letter to enlighten legislators as to the possible impact on independent schools and advocate for your interests in their process. To support our case, we conducted a survey to show how many schools would feel significant impact from the changes. Findings revealed that 38% of schools said changes would not impact them; 28% said only one or two employees would be affected; and 37% said three or more employees would be affected, with 12% saying it would impact seven or more employees. One qualitative response illustrates some of the concerns: “Since we are such a small school, this does have a big impact on us and would likely affect ALL additional employees we will hire who are non-faculty.” At other schools, some employees would lose paid days off if they fall out of exempt status.

This time, we and other groups advocating for more moderate adjustments were not so victorious, and the approved standards will go into effect in two rounds, the first in July of this year and the rest in January of 2025. You can read more about those rules in a Net Assets news item and NAIS Legal Tip of the Week (available only to NAIS members). NBOA and NAIS members can also tune into a just-in-time webinar, as mentioned above, this Thursday at 3:30 p.m. ET, featuring Whitney Silverman, assistant legal counsel and director of government relations at NAIS; Amber Stockham, senior director, human resources programs at NBOA; Grace Lee, NBOA legal counsel and partner at Venable LLP; and Jennifer Carroll, partner at Fisher Phillips. NBOA members can also consult our updated Salary and Overtime Exemption Guidance toolkit any time.

As ever, NBOA is here to provide programs, products and services that accelerate your success and help you through your challenges. We will also continue to collaborate diligently with our fellow independent school associations to make sure your interests are heard, not only on Capitol Hill, but around the country, so we build stronger schools together for a better future for our students and families.

Follow NBOA President and CEO Jeff Shields on LinkedIn.