Fair Labor Standards Act
Overview
In the summer of 2023, the US Department of Labor (DOL) proposed changes to the Fair Labor Standards Act of 1938 (FLSA), which sets the rules for how employers pay employees. The FLSA governs federal minimum wage levels and which jobs are eligible for overtime, and it defines exemptions from overtime for jobs where the duties meet specific criteria (called Duties Tests), and where the wages exceed certain thresholds.
The final regulations were published on April 24, 2024. Effective July 1, 2024, the salary threshold increased to the equivalent of an annual salary of $43,888. That will increase to $58,656 on Jan. 1, 2025. Starting July 1, 2027, salary thresholds will update every three years. The increased salary thresholds scheduled for January 1, 2025 were vacated and the previous salary threshold in effective since January 1, 2020 was reinstated. For exemption status, this means employees must still meet the $684/week threshold ($35,568/year) and the duties test.
Human Resources communicated with managers and employees impacted to help them understand the proposed changes. Due to the timing of these changes, Davidson College elected to keep employee’s positions classified as exempt if they met the salary threshold of $43,888 per year ($844 dollars per week).