Iowa State is preparing for phase 2 of changes to federal overtime pay requirements that take effect Jan. 1, 2025.
In April, the U.S. Department of Labor issued a final rule raising the salary threshold for nonexempt employees eligible for overtime pay under the Fair Labor Standards Act (FLSA), with the increase occurring in two phases.
On July 1, the phase 1 increase moved the minimum salary threshold to $43,888. Sixty-six employees were moved to nonexempt status, making them eligible for overtime pay or compensatory time as applicable. These employees and all other currently nonexempt salaried employees will move to a semimonthly pay cycle on Oct. 1.
Phase 2 further increases the minimum salary threshold to $58,656. This means, in most cases, employees who make less than $58,656 per year will move to nonexempt status and be covered by FLSA overtime rules. It is estimated this change will impact approximately 600 professional and scientific (P&S) staff, faculty and contract staff.
Notifying employees
FAQ:
Additional information about the new overtime pay requirements.
In the coming weeks, all potentially impacted employees and their managers will be notified, and university human resources will provide additional resources to begin planning.
"It's critically important that we work together as one university to comply with this federal mandate," said President Wendy Wintersteen. "Regardless of exemption status, we value all of our faculty and staff and their efforts to advance ISU's mission and support our students. We appreciate your understanding and patience as we navigate this process."
Determining nonexempt status
Under FLSA, nonexempt employees must receive overtime pay of at least 1.5 times their regular rate for work exceeding 40 hours per week. The salary threshold is not the sole factor in determining whether an employee will move to nonexempt status. An employee whose salary is below the threshold may remain exempt from overtime pay if their position meets certain criteria outlined by the U.S. Department of Labor. The final determination of an Iowa State employee's exemption status is made by the university's office of general counsel.
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