Fair Labor Standards Act (FLSA)
On April 23, 2024, the Department of Labor (DOL) approved a new overtime rule under the Fair Labor Standards Act (FLSA) that is set to go into effect July 1, 2024. This new rule will require employers to pay overtime to all employees making less than $43,888 annually. Additionally, the DOL’s rule implements an automatic threshold increase to $58,656 effective January 1, 2025, and establishes that automatic updates to the threshold will occur every three years.
Louisiana State University (LSU) will proceed with converting all individuals who have a salary below $58,656 and/or who occupy a position with a position range minimum less than $58,656, to hourly non-exempt for the January 1, 2025 implementation.
Certain employee groups are exempt from the DOL salary test and are not required to meet the new salary threshold; this includes teachers/instructors, coaches, and medical/veterinary residents and interns. These are the only classifications exempt from this proposed overtime rule. There is no proration for part-time workers.
If you make less than $58,656 annually and/or occupy a position with a position range minimum less than $58,656, your position will be reclassified as non-exempt hourly, and you will be eligible for overtime pay to comply with FLSA regulations.
LSU will reclassify employees who have a salary below $58,656 annually and/or who occupy a position with a range minimum of less than $58,656 from exempt to non-exempt status effective January 11th, 2025, in Workday. Individuals who will convert must retain paper timesheets for the period of December 28th - January 10th to ensure overtime/compensatory time is appropriately provided. Paper timesheets must be maintained during this period to ensure we are in compliance with the FLSA regulations that are effective January 1, 2025.
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.