The College and University Personnel Association for Human Resources (www.CUPA-HR.org) recently described proposed changes to FLSA overtime rules as follows:

Current Rules

Currently under the FLSA, an individual must satisfy three criteria to qualify as a white collar employee exempt from federal overtime pay requirements:

  • first, they must be paid on a salary basis (the salary basis test)
  • second, that salary must be more than $455/week, or $23,660 annually (the minimum salary requirement or salary threshold)

One important note, teachers, including professors, are not required to meet this portion of the test

  • third, their “primary duties” must be consistent with executive, professional or administrative positions as defined by the Department of Labor (the primary duties test)

Employees who do not meet [all] these three requirements or fail to qualify for another exemption must be treated as “hourly” or “nonexempt” employees and be paid for each hour worked over 40 in a given work week at a rate of one and a half times their normal hourly rate.

Proposed rule changes

Department of Labor (DOL) proposed setting the new minimum salary level at the 40th percentile of weekly earnings for full-time salaried workers, which is estimated to be $970 a week ($50,440 annually)

  • This is a 113% increase over the current minimum salary level of $455 per week ($23,660 annually)

DOL proposed automatically escalating this minimum salary on an annual basis by attaching it to the 40th percentile or by indexing the $970 number to CPI-U

DOL did not include a specific proposal to modify the standard duties tests; however, the department sought comments on whether or not they should do so.