2024 FLSA Rule Changes
FLSA Overtime Changes Final 2024 Rule
On April 23, 2024, the U.S. Department of Labor announced the updated overtime rule in the Fair Labor Standards Act. The updated Department of Labor rule raises the salary threshold for determining who is exempt from required overtime pay. Human Resources is reviewing data and working with leadership to determine the positions likely affected by the new regulations.
North Carolina A&T is committed to a smooth transition for employees affected, and individuals will be contacted once final determinations have been made.
Changes:
The rule takes effect in two stages and does the following:
- Establishes $43,888 as the salary threshold required to be exempt from overtime pay requirements, effective July 1, 2024.
- Increases the salary threshold to $58,656, effective January 1, 2025.
- Requires salary threshold updates every three years based on the latest earnings data.
It requires that:
- Some impacted employees may receive salary adjustments and remain exempt. They will continue to be ineligible to earn overtime for any time worked over 40 hours.
- A small number of exempt employees making less than the new FLSA salary threshold will become nonexempt if their position as a whole moves to nonexempt.
- Exempt employees who work a part-time schedule may also be impacted.
Employees who move from exempt to nonexempt will have more detailed timekeeping requirements, but nothing about their work will change. They will not experience changes to their duties, pay, benefits, or leave accrual rates. The final determination of which impacted exempt employees falls into which categories is under review. Information will be communicated of any impact to departments and employees.
Who is Affected:
Exempt staff members currently earning less than the updated threshold may be affected. HR continues to review all data to determine who may be affected. HR is working collaboratively with the Division of Business & Finance and the Division of Legal Affairs, Risk and Compliance (DLARC) and continues to monitor reliable resources such as the U.S. Department of Labor Wage & Hour Division, the College and University Professional Association for Human Resources (CUPA-HR), and the Society for Human Resource Management (SHRM) for regular updates and guidance on DOL’s overtime final rule and the court case underway.
Next Steps:
- Employees do not need to take action at this time.
- If these changes apply to you, HR will notify your supervisor and you of any changes to your status.
- Training will be provided for any directly impacted supervisors and employees
- As it becomes available, additional information will be shared through emails, townhalls and campus forums.
- Employees are encouraged to read through our FAQ’s for additional information.
- A list of federal FAQs regarding the rule can also be found on the DOL website.
FREQUENTLY ASKED QUESTIONS
The updated rule raises the salary threshold for determining who can be exempt from required overtime pay. In 2016, a similar rule was issued but was halted by an injunction, which may occur again this year. If the courts halt any provision of the 2024 rule changes, N.C. A&T will reassess its approach to these changes and update the campus community. The rule takes effect in two stages and does the following:
- Establishes $43,888 as the salary threshold required to be exempt from overtime pay requirements, effective July 1, 2024.
- Increases the salary threshold to $58,656, effective January 1, 2025.
- Requires salary threshold increases every three years based on the latest earnings data.
To be exempt, an employee must meet ALL standards in the following “tests”:
- be paid not less than the minimum salary established by the FLSA – the “salary level test;”
- AND be paid on a salary basis as opposed to an hourly basis – the “salary basis test;”
- AND perform certain duties as outlined in one of the “duties tests.”
To be exempt, an employee must qualify under one or more of the following tests:
- Executive exemption test
- Administrative exemption test
- Professional exemption test
- Computer exemption test
- Highly compensated employee exemption test
Each duties test has specific requirements that must be met for an employee to be exempt. For example, the Executive Exemption requires that an employee a) supervise two or more full-time employees (or their FTE equivalent), b) have authority to hire and fire, or meaningfully recommend hiring and firing, and c) manage a recognized department or subdivision. More information on the exemption tests is available on the Department of Labor website.
Yes. On May 23, a group of 13 local and national associations and Texas businesses filed suit in federal court in Texas, challenging the U.S. Department of Labor’s rule setting new minimum salary thresholds for the white-collar overtime pay exemptions under the FLSA. The suit claims that the salary threshold that goes into effect on January 1, 2025, is so high it will result in more than 4 million individuals being denied exempt status, even though these individuals could be reasonably classified as exempt based on their duties, and in doing so, the rule violates both the statutory language of the FLSA and prior court decisions. The suit also challenges the automatic updates.
N.C. A&T Human Resources is working collaboratively with the Division of Business & Finance and the Division of Legal Affairs, Risk and Compliance (DLARC) and continues to monitor reliable resources such as the U.S. Department of Labor Wage & Hour Division, the College and University Professional Association for Human Resources (CUPA-HR), the Society for Human Resources (SHRM) for regular updates and guidance on DOL’s overtime final rule and the court case underway.