Department of Labor announces changes to Fair Labor Standards Act salary thresholds for overtime exemption

The U.S. Department of Labor (USDOL) has released a final rule that will raise the salary threshold for overtime exemption for executive, administrative and professional employees. As shared with the Ohio University community in March, this change was first proposed in August with the final rule expected in April of this year.

USDOL has announced a phased approach to implementation. Beginning July 1, 2024, the salary threshold will move to $43,888 per year ($844 per week), meaning that any employee making less than this threshold must be eligible for overtime pay of at least 1.5 times their regular pay if and when they work more than 40 hours per week. This change will go into effect July 1 unless it is challenged in court resulting in an injunction. Whether or not there is a delay in implementation, Ohio University will move forward with actions to comply with the new rule on July 1.

To ensure equity and consistency within our University pay structure, beginning July 1, Ohio University will move 1.0 FTE administrative employees in pay grade 14 or below from salary to hourly compensation, regardless of where the employee’s salary falls within the pay grade. Those employees will be eligible for overtime when required to work more than 40 hours per week. The minimum full-time salary of pay grade 15 will be moved to $43,888, and currently salaried 1.0 FTE employees in pay grade 15 will be reviewed to ensure they are at the minimum of the paygrade and will remain exempt from overtime. However, this status may change to hourly in the future if the regulation takes effect as the USDOL has planned on Jan. 1, 2025. 

This change does not impact faculty or coaches, who fall into other USDOL exemption categories.

Ohio University Human Resources has provided a preliminary list of employees impacted by phase one to Division leaders. Once finalized, unit managers and leaders will communicate in the coming weeks with those impacted to discuss if and how this change will affect their individual work schedule, pay and timekeeping. HR will provide training for both affected employees and supervisors of exempt employees moving to hourly.

The USDOL’s phased approach includes a second substantial increase to the minimum salary threshold for executive, administrative and professional employees, raising it to $58,656 ($1,128 per week) beginning Jan. 1, 2025. University Human Resources is closely following news about this second wave increase and possible delays that might result from legal action. HR is also developing a phase two implementation plan should the second salary threshold move forward as planned. If the change remains as scheduled for Jan. 1, OHIO’s implementation plan for phase two will be announced no later than Nov. 1, 2024.

For more information on the phase one implementation, visit OHIO’s HR website.