Fair Labor Standards Act (FLSA) Regulatory Changes

Sept. 25, 2019

Yesterday morning, the Department of Labor announced the anticipated final rule change to the Fair Labor Standard Act (FLSA). This rule change will increase the minimum weekly salary threshold used to determine if a position can be exempt from the FLSA’s overtime requirements.

What changed?

  • The minimum salary threshold for individuals to be exempt from overtime will increase from $455 per week ($23,660 annually) to $684 per week ($35,568 annually).
  • The total annual compensation requirement for highly compensated employees will increase from $100,000 to $107,432.

The Department of Labor is requiring that the new rule be implemented by January 1, 2020. (For more information, visit www.dol.gov/whd/overtime2019)

What’s next from the Compensation team?

  • Colleges/Divisions will receive a data file from the Compensation team identifying currently exempt employees who do not meet the minimum salary threshold.
  • Colleges/Divisions will receive a data file identifying exempt employees who are currently below the new salary threshold but would be above the salary threshold with an increase to the new minimum salary range under UCAP.
  • We are developing training materials and talking points for supervisors to discuss the changes with employees.

Note: Attorneys, physicians, and faculty members whose duties consist primarily of teaching will remain with exempt status under the FLSA. The new regulations may allow some additional exemptions for positons specific to higher education. More guidance on these exemptions will be forthcoming.

What does this mean for employees?
Exempt employees whose average weekly earnings are less than $684, based on either full or part-time equivalency, will be automatically converted to non-exempt, hourly employees on December 30, 2019, the beginning of the pay period that includes January 1, 2020.

What does this mean for supervisors?

  • Supervisors should work with their department business officers, the Compensation team, and designated Human Resource Consultants to understand the impacts to their staff to evaluate available options.
  • Supervisors should review FLSA resources (PDF) on the UCAP website and the FLSA and Overtime policy on the payroll website. They should also complete UAccess training on the FLSA and time keeping procedures.

What does this mean for departments?
We encourage department business officers to work in conjunction with local leadership to determine the financial and human capital impact within their areas.

How does this change affect UCAP implementation?
UCAP implementation will move forward as scheduled for January 27, 2020. This new rule may require changes to salary minimums and conversion of employees to non-exempt status to occur earlier than planned. The Compensation team will work with departments to identify impacted employees and the timeline for implementing the rule changes.

Thank you,

Jan Elizabeth Myers
Director, Compensation
Division of Human Resources