Dear faculty and staff,听
We are writing to update you on a change to the Fair Labor Standards Act (FLSA) that affects overtime pay exemption criteria. Effective July 1, 2024, the minimum salary required for an employee to qualify for an exemption from overtime pay will be increased.
The Fair Labor Standards Act (FLSA) establishes federal minimum wage and overtime pay standards. Among its provisions, there are various exemptions to overtime pay requirements, specifically for executive, administrative, and professional employees. These exemptions are determined by a combination of a duties test, a salary basis test, and a minimum salary level.
On April 23, 2024, the U.S. Department of Labor announced a final rule to raise the minimum salary that an employee must receive to be eligible for an exemption from overtime. The current minimum salary threshold is $684 per week ($35,568 per year). Beginning July 1, 2024, this threshold will increase to $844 per week ($43,888 per year). Further, starting January 1, 2025, the threshold will rise to $1,128 per week ($58,656 per year).
The Position Management and Compensation Team and Research Faculty team in campus HR have communicated with departments that have employees impacted by the July 1, 2024 salary level increase to $43,888 per year. This change will mainly听affect the FLSA exemption status of some part-time staff employees and some research faculty.
Options being discussed include:
- Increasing salaries that are close to the new salary threshold
- Reclassifying employees from exempt to nonexempt if the salary increase is too large听
- Adjusting the percentage of time
- Updating staff position descriptions if appropriate
Each impacted employee will receive a letter informing them of any changes resulting from this final rule.
There may be legal challenges to the final rule and campus HR is closely monitoring developments. Human Resources听is planning for the January 1 potential ruling, keeping in mind the possibility that the rule may be overturned. More information regarding the potential January 1, 2025, salary threshold increase will be shared in the upcoming months.
Please reach out to human resources if you have questions or concerns.听
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