University leaders are reviewing just-issued U.S. Department of Labor regulations that change overtime pay requirements and will make plans to be in compliance by July 1.
On April 23, the Labor department issued its final rule to change overtime pay regulations under the Fair Labor Standards Act (FLSA). The new rule increases the minimum salary threshold to $43,888 on July 1. The current threshold is $35,568. Under the new rule, the minimum threshold will increase again on January 1, 2025, to $58,656, and then automatic updates to the threshold will occur every three years.
University human resources (UHR) and the general counsel office have begun to review the changes and will develop plans to inform campus on the expected impact. Implementation of the first phase of the regulations is required by July 1.
Under FLSA, employees receive overtime pay -- at least 1.5 times their regular rate -- for work exceeding 40 hours per week, unless the employee's position meets certain standards for exemption. The FLSA outlines these standards for employees who would be considered "exempt" through specific "duties tests" -- and who make at least the minimum threshold salary regardless of time worked. The general counsel office, in partnership with UHR, interprets the standards for exemption and whether they apply to jobs or positions at ISU.
After implementation of the new rule, employees who no longer meet the salary threshold will have their classification transitioned to a non-exempt status, becoming eligible for overtime payments or compensatory time when applicable.
