The Fair Labor Standards Act requires employers to pay minimum wage and overtime to employees who work more than 40 hours per week, unless an exemption applies. Some camps rely on the exemption for executive, administrative, and professional ("Executive") employees, while many other camps rely on the separate "Organized Camp" exemption. The Executive exemption is about to change based on a new Department of Labor rule. The Organized Camp exemption remains the same.
The Executive Exemption
Under the Section 13(a)(1) exemption, certain executive, administrative, and professional employees are exempt from the minimum wage and overtime rule if they meet a three-part test:
they earn a fixed salary, regardless of hours worked;
their salary meets certain minimum weekly pay requirements; and
they perform primarily executive, administrative, or professional duties.
Currently, the minimum salary that an employee must earn to qualify for the Executive exemption is $684 per week or $35,568 annualized. Based on the US Department of Labor's new rule, this minimum weekly salary is scheduled to increase in two phases: After July 1, 2024, the minimum salary threshold will become $844 per week or $43,888 annualized. After January 1, 2025, the minimum salary threshold will become $1,128 per week or $58,656 annualized.
The "Organized Camp" Exemption
Many camps rely on a different exemption from overtime and minimum wage requirements. Section 13(a)(3) of the Fair Labor Standards Act provides an exemption for an "amusement or recreational establishment, organized camp, or religious or non-profit education conference center" if it meets one of two tests: “(A) it does not operate for more than seven months in any calendar year” or “(B) during the preceding calendar year, its average receipts for any six months of such year were not more than 33 1/3 per centum of its average receipts for the other six months of such year.”
The Organized Camp exemption operates independently of the Executive exemption. If your camp does not pay minimum wage and overtime because it's exempt under the Organized Camp exemption, then the increased salary thresholds under the Executive exemption don't affect you.
State Law Might Have Stricter Rules
While many camps are exempt from overtime requirements under federal law, some states have stricter exemption standards. If state law overtime and minimum wage rules differ from federal law, employers must meet the stricter of the two requirements.
Conclusion
The new minimum wage and overtime rule increases the minimum salary threshold required for the Executive exemption. The new rule does not impact the separate exemption for Organized Camps that meet one of the seasonality tests. Thus, camps that meet one of the seasonality tests remain exempt from paying minimum wage and overtime, regardless of whether their employees meet the increased salary threshold for the new Executive exemption. Camps also need to check state law for any stricter rules.