Department of Labor Announced Changes to Exempt Status

October 30, 2019
Business Affairs

Department of Labor Announced Changes to Exempt Status

On September 25, 2019, the Department of Labor announced the anticipated final rule change to the Fair Labor Standard Act (FLSA). This rule change increases the minimum weekly salary threshold used to determine if a position can be exempt from the FLSA’s overtime requirements. The Department of Labor requires the new rule to be implemented by January 1, 2020. For more information, visit the Department of Labor website.

What Changed?  

The minimum salary threshold for employees to be exempt from overtime increases from $455 per week ($23,660 annually) to $684 per week ($35,568 annually) effective January 1, 2020.

FLSA QuizWhat Does This Mean for Employees?

Exempt employees whose average weekly earnings are less than $684, based on either full- or part-time equivalency as of January 1, 2020, will automatically convert to non-exempt.  Employees moving to a non-exempt status will complete a “punch” timesheet beginning January 1, 2020. Supervisors will notify affected employees of the change.

Employees not affected include the following:  

  • Exempt employees earning $35,568 or more annually remain in an exempt status.
  • Attorneys, physicians, athletic coaches (assistant/associate coaches) and faculty members whose duties consist primarily of teaching will remain with exempt status under the FLSA, regardless if they meet the salary threshold.

Next Steps

The Compensation team will work with departments to identify impacted employees and the timeline for implementing the rule changes.