Fair Labor Standards Act (FLSA)
On April 23, 2024, the U.S. Department of Labor’s (DOL) final overtime pay rule was released. This new rule will require employers to pay overtime to unclassified employees making less than $43,888 annually effective July 1, 2024. Additionally, the Department of Labor’s rule implements an automatic threshold increase to $58,656 effective January 1, 2025, and established automatic updates to the threshold that will occur every three years.
Certain employee groups are exempt from the Department of Labor salary test and are not required to meet the new salary threshold; this includes teachers/instructors, coaches whose main responsibility is not recruitment, medical/veterinary interns, and residents. These are the only classifications exempt from this proposed overtime rule.
Note that there is no proration for part-time workers, meaning regardless of the full-time equivalent salary, if the salary threshold is not met for any reason, the position shall be classified as non-exempt. Human Resource Management (HRM) is assessing all job profiles and workers who are currently below the new salary threshold.
Based on the new federal FLSA regulations, the large-scale change, and in consideration of the timing and ultimate benefit to those workers who are converting, LSU will reclassify employees and positions making less than $58,656 annually from exempt to non-exempt status effective June 29th, 2024. The June 29th date aligns with the start of the bi-weekly pay period and ensures LSU complies with the new federal regulation. This change affects departments in the following ways:
- Affected employees will go to a biweekly pay cycle and have their base salary converted to an hourly rate. Affected employees will be required to enter their time in Workday to get paid. Timely manager approval in Workday is required for the employee to get paid.
- Affected employees will be paid 1.5 times their regular hourly rate for time worked more than 40 hours in an assigned and contiguous workweek (Saturday 12:00 am to Friday 11:59 pm).
- Each department is responsible for financing their overtime or compensatory time from their regular budget. Departments should account for their annual overtime needs within the annual budget construction process.
- Departments must establish and inform each employee in writing who is being paid an annual base salary under $58,656 of their regular work hours, work schedule, and hourly rate. HRM will provide a standard template for departmental use.
Managing Overtime: Departmental Choices
- Employees shall not enter hours beyond 40 in the workweek without express permission from their supervisory team.
- Departments can also manage overtime costs by offering compensatory time provided certain criteria are met. Offering compensatory time in lieu of overtime pay must be agreed upon in writing before the work is performed.
- Departments should establish written guidance on how overtime is approved and assigned to ensure the management of time is applied consistently and fairly within the organization.
- Departments can manage overtime costs by modifying workloads and adjusting schedules or hours through a flexible work schedule as outlined in Policy Statement-79.
HRM will set up meetings with those units with affected employees and provide a list of affected employees to assist in developing a strategy to comply with the regulations that align with departmental needs.