The Biden Administration announced in April 2024 that it would raise the minimum salary threshold for white-collar employees under the Fair Labor Standards Act (FLSA) to maintain exempt status from overtime pay. These changes will occur in three stages according to the Department of Labor: the first raised the minimum salary to $43,888 on July 1st, the threshold will climb to $58,656 by January 1st, and then it will increase every 3 years starting in 2027. Last month, College and University Professional Association for Human Resources (CUPA-HR) published The Potential Impact of the 2024 Overtime Rule on Higher Education to assess how these decisions would impact the field overall. Their results determined the following about each threshold adjustment based on survey results from “exempt, full-time employees excluding coaches and childcare teachers” who are affected by the updated rules:
Threshold #1
- Minimum Salary Threshold: $43,888
- Implementation Date: July 1, 2024
- # of Employees Impacted: 10,944
- # of Institutions Impacted: 646
- # of Positions Impacted: 258
- Total Operating Expenses Across Institutions: $257,495,035,868
- Total Cost Across Institutions: $36,627,039
Threshold #2
- Minimum Salary Threshold: $58,656
- Implementation Date: January 1, 2025
- # of Employees Impacted: 58,453
- # of Institutions Impacted: 882
- # of Positions Impacted: 326
- Total Operating Expenses Across Institutions: $382,885,757
- Total Cost Across Institutions: $382,885,757
The CUPA-HR report concluded that the initial threshold increase will negatively affect institutions across higher education; particularly those with lower operating expenses who could see two times the negative impact as their wealthier counterparts. To read the full report, click here.
SOURCE: The Potential Impact of the 2024 Overtime Rule on Higher Education