New Update on FLSA Project

In May, we notified you that the U.S. Department of Labor (DOL) announced changes to the Fair Labor Standards Act (FLSA) regulations governing which employees are eligible to receive overtime pay as non-exempt (hourly) employees.

We’d like to provide you with more background information about the changes to the law that will affect the classification of some employees. The federal Fair Labor Standards Act (FLSA) and state laws govern position classifications as exempt or non-exempt from minimum wage and overtime, and these laws apply to all positions.  Positions that are exempt from overtime must meet specific criteria, such as paying a minimum salary amount, paying on a salary basis, and passing a specific job duties test.  Positions that do not meet these criteria are called non-exempt, and the laws require that non-exempt positions are paid at least minimum wage and overtime.

Prior to the recent federal law changes, employees who were classified as exempt had to make at least $455 (gross pay) per week. However, on May 18, 2016 the Department of Labor announced that the new minimum salary threshold will be $913 (gross pay) per week, which annualizes to $47,476 per year.  This rule takes effect on December 1, 2016, however, USG has targeted a November 1, 2016 implementation date for all member institutions.

Our review of those positions affected by the change of the salary threshold has already begun and will continue as we further define the future structure. We will continue to communicate with you as the process advances.