On April 23, 2024, the Department of Labor (DOL) published a new Fair Labor Standards Act (FLSA) final rule regarding overtime and exemptions for executive, administrative and professional employees. This rule implements an increase in the salary threshold for overtime exemption in two phases.
- Phase 1: Effective July 1, 2024, the salary threshold increased to $43,888 per year ($1,688 bi-weekly / $844 per week).
- Phase 2: Effective January 1, 2025, the salary threshold will increase further to $58,656 per year.
Employees working in excess of 40 hours per week are required to be paid overtime, unless they qualify for an exemption from the FLSA requirement.
Please note that the Final Rule does not make any revisions to the duties required to take advantage of the exemption.
Under DOL’s overtime regulations, employees must satisfy the following three criteria to qualify as a white-collar employee exempt from federal overtime pay requirements:
- The employee must be paid on a salaried basis (known as the “salary basis test”);
- The employee’s salary must meet a minimum set by DOL (known as the “minimum salary requirement” or “minimum salary threshold”); and
- The employee’s “primary duties” must be consistent with the executive, professional, or administrative positions as defined by DOL (known as the “duties test”).
Employees who do not meet all three requirements or fail to qualify for another exemption must be treated as “hourly” or “nonexempt” employees and must be paid for each hour worked and, for all hours worked over 40 in a given workweek, at a rate of one and a half times the employee’s normal hourly pay.
BOISE STATE FLSA TIMELINE:
Boise State University implemented the first threshold adjustment on July 1, 2024. While the final ruling is facing national legal challenges, the University is proactively preparing for the overtime rule change and is developing a strategy for compliance.
More information on the next phase of the adjustment will be provided to departments later this fall, according to the timeline outlined below.
September to Mid-October: Conducting Impact Analysis
The compensation team continues to review exempt positions (professional staff) that are currently paid below $1,128 per week as of January 1, 2025, and determines what strategy to adopt to comply with FLSA’s new regulations.
October: HR will meet with supervisors, department heads and business managers
HR will meet with leaders of impacted employees to review recommendations and discuss preferred options. HR will offer recommendations that are based on solid data and explain how the preferred options are linked to better business results and the university’s overall strategy.
October to Mid-November: Review Financial Impact with Senior Management
Based on the impact analysis and the outcome of the review process with supervisors and managers, HR will present a proposal to senior management detailing how the new overtime rule will impact the University. The proposal will also outline preferred options to mitigate significant financial impacts and address employee morale concerns. A final decision will be made to ensure that any additional wages and expected benefit changes are appropriately budgeted for both the current and upcoming fiscal years.
November to early December: Communication Plan
HR will develop a communication plan to announce changes to affected employees and their supervisors to educate them on the regulatory changes and the recently completed analysis.
December 13, 2024: Official Notifications Sent
HR will send official notifications and resources to affected employees and their supervisors informing them of the change, conveying information about the regulatory changes and the completed analysis.
December 22, 2024: Salary Changes go into Effect
Effective Dec. 22, 2024, salary changes or position reclassifications for impacted employees will go into effect.
Questions?
Contact our Compensation team at compensation@boisestate.edu.