Good morning managers,
We wanted to inform you about an important update regarding the Fair Labor Standards Act (FLSA) exempt (salaried) minimums, which prompted a review of salaries for exempt employees at Rice.
Effective July 1, due to changes in the regulations regarding overtime rules, the Rice Compensation Team evaluated each impacted employee and is considering either 1) adjusting the salaries of certain exempt employees to maintain compliance with federal law to get them to the new minimum, or 2) moving these employees to a non-exempt (hourly) status.
This adjustment impacts 43 staff in 40 departments across campus. We will contact these impacted departments/managers/divisions directly. Note that these changes will also impact any new roles or job offers you may have on or after July 1.
The new law requires that:
- The minimum salary threshold for an exempt employee will increase to $43,888 per year (or $844 per week) on July 1, 2024.
- The new salary or the change to non-exempt status (hourly) will be effective July 1st.
- Employees who will be moved to the minimum to remain exempt (salaried) will see the change in their first paycheck of FY25.
- Employees who transition to non-exempt (hourly) status may be impacted by:
- A switch in payroll frequency – salaried employees are paid semi-monthly (twice a month), whereas hourly employees are paid bi-weekly (every other week).
- The potential loss of paid time off accrual (see Policy 405).
- Hourly employees are eligible for overtime (1.5 times the hourly rate) after working 40 hours a week. Some employees may make more than the proposed new minimum based on their work schedule.
- Managers of hourly employees must approve hourly employee timesheets in iO.
- The default will be to transition the impacted employee to an exempt status by increasing their salary to the new minimum.
- Some employees may be required to remain exempt, depending on their job responsibilities and the FLSA regulations.
- Please contact compensation@rice.edu should you receive the email regarding an impacted employee who you feel should be moved to non-exempt (hourly) status. The compensation team will review the request and schedule a discussion if appropriate. Requests will be reviewed individually and are subject to approval by the compensation team.
There is an additional increase to the FLSA exempt minimum to $58,656 per year, currently scheduled for January 1, 2025. We are planning for this change, but this significant increase is currently being challenged in court. We will continue to monitor the situation and report to you on any changes.
Rice is supporting departments for this July 1, 2024, change:
- The increased amount for individuals funded on UGO/General Fund will be covered by central for FY25 (one-time funds) and will be built into budgets for FY26 and beyond.
- The increased amount for individuals on research, auxiliary, gift, endowment, or other funds will be covered directly by those funds.
The compensation team will contact the affected employees directly to communicate these changes and address any questions or concerns they may have. Your role as manager will be crucial in supporting these adjustments and ensuring a smooth transition for your team members.
Please let us know if you have any questions. We appreciate your cooperation in maintaining Rice’s compliance with FLSA regulations.
Thank you,
Your Total Rewards Team