2025 Department of Labor (DOL) Salary Threshold Changes
Find answers to questions you may have about the salary threshold changes made by the U.S. Department of Labor.
What is changing?
Effective January 1, 2025, the DOL is increasing minimum salary threshold for exempt employees. Under the FLSA, employees are deemed to be a covered employee (i.e., “nonexempt”) and are eligible for overtime/comp time for hours worked beyond 40 in a workweek unless the employee meets the salary basis, salary level, and job duties tests to be “exempt” from overtime/comp time. The following table shows the salary threshold that must be met for an employee to be considered exempt. Even if an employee is paid above these levels, they must still meet the other two tests to be considered exempt.
| Effective Date for Salary Level Test | Minimum Annual Salary Threshold | % Change from Amount before 7/1/24 ($35,568) |
|---|---|---|
| July 1, 2024 | $43,888 ($844 weekly) | 23.4% |
| January 1, 2025 | $58,656 ($1,128 weekly) | 64.9% |
How many employees will be affected?
Human Resources (HR) has identified approximately 475 exempt employees that will be affected on January 1, 2025.
Do all exempt workers need to meet the minimum salary threshold requirement?
No. Some workers are exempt even though they are paid below the minimum salary threshold. Since 2019, DOL guidance states that certain jobs such as teachers and coaches who meet certain requirements can be exempt even though they are paid below the minimum salary threshold.
What if an affected employee works less than 12 months a year?
For full-time staff employees who work on less than a 12-month basis, the weekly salary amount will be used to perform the salary level test. Please consult with HR to review specifics (hr@usu.edu).
Can institutions provide compensatory time to nonexempt employees in lieu of overtime pay?
Yes. Under the FLSA and its implementing regulations, nonexempt employees at a “public agency” may be compensated with compensatory time (i.e. comp time) off in lieu of overtime pay. At USU, nonexempt employees will be compensated with compensatory time off at a rate of not less than one and one-half hours for each hour worked over 40 hours in a given workweek. Most nonexempt employees are not allowed to accrue more than 240 hours of compensatory time off.
Are there significant differences for how a nonexempt employee’s time should be tracked and paid (e.g., recording time, punctuality, meal periods, holiday work and travel time)?
Yes. Employees and supervisors affected by this change should review USU Policy 3205: Time and Attendance which covers recording hours worked, absenteeism and tardiness, flexible time scheduling, meal and rest periods, holiday work, and travel-time payment.
Will January 1, 2025 be the final salary threshold increase?
No. The threshold will be automatically updated every three years by tying the threshold to the 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage census region. The automatic updates will begin on July 1, 2027.
Will job titles be changed as a result of this final rule?
Possibly. USU HR will work with leadership to review employees affected by the change. In cases of single incumbent job titles, no job title change is planned. For jobs where there are multiple incumbents across campus at varying salary levels, it may be necessary to evaluate job titles if not all incumbents will be moved to nonexempt. These will be reviewed and handled on a case-by-case basis by HR in consultation with leadership, Legal, and the Civil Rights & Title IX Office as appropriate.
Can two employees with the same working job title be different FLSA statuses (e.g. one employee exempt and one employee non-exempt)?
Due to the level of audit risk, it is inadvisable to have employees performing similar duties with two different FLSA overtime statuses. Therefore, HR will work with departments to see if there are justifiable differences to permit reclassification/retitling of certain jobs (e.g. program coordinators) where more specificity can clarify FLSA status. If not, then the default approach will be to reclassify all exempt employees in the same classification to nonexempt if there are employees doing the same work who are below the salary threshold.