FLSA Changes

On April 23, 2024, the U.S. Department of Labor (DOL) released a final rule that updates the FLSA salary threshold for overtime-exempt workers. 

Overview of changes

The first change to this final rule went into effect July 1, 2024, and increased the minimum salary threshold for exempt positions to $844 per week or $43,888 per year. The remaining phases are:

• Phase 2: Effective Jan. 1, 2025, the minimum salary threshold for exempt employees will change to $58,656 per year.
• Phase 3: The threshold will be automatically updated every three years starting in July 2027. 

At Virginia Tech, these changes impact all exempt positions including faculty, staff, and P14s are impacted. 

January 1, 2025, FLSA Change Frequently Asked Questions

What changes are happening to the Fair Labor Standards Act (FLSA)?

On April 23, 2024, the Department of Labor (DOL) issued a final rule to alter the overtime pay regulations under the Fair Labor Standards Act (FLSA). 

The rule increased the minimum salary threshold for most exempt (not eligible for overtime) employees to $844 per week or $43,888 per year on July 1, 2024.  Effective Jan. 1, 2025, the minimum salary threshold for exempt positions will increase to $1,128 per week or $58,656 per year. The rule also implements automatic updates to the minimum salary threshold that will occur every three years beginning in 2027.

When will the FLSA updates occur?

The first minimum salary threshold changed to $844 per week or $43,888 per year on July 1, 2024. Currently, the second salary threshold increase to $1,128 per week or $58,656 per year goes into effect Jan. 1, 2025. 

What will happen to non-teaching exempt positions that are paid below $1,128 per week or $58,656 per year?

Positions must either:

• Receive a salary increase to the new exempt threshold to maintain exemption status or 
• Be reclassified as non-exempt and track hours worked to ensure overtime pay is received for any hours worked over 40 each week

Who will decide which positions receive a salary increase and which positions will move to non-exempt?

The Division of Human Resources, in consultation with college and department HR representatives and senior leaders, is conducting a comprehensive review of all impacted positions across the university. Various factors will be considered when determining the final FLSA classification for each position type, including cost and position market value.

Is there anything that could prevent the Jan. 1, 2025, threshold increase from going into effect?

There are currently several ongoing legal challenges to the Jan. 1, 2025, ruling. Virginia Tech will continue to monitor these cases and will only move forward with any changes to comply if the FLSA ruling moves ahead as planned.

Is moving from an exempt to non-exempt position considered a demotion?

No. This change is required by law and does not reflect the value of the employee’s role to the university. FLSA was enacted to protect workers; being non-exempt ensures you are paid for all hours worked.

Will benefits change for exempt employees moving from exempt to non-exempt? 

No. A/P faculty and staff who are reclassified from exempt to non-exempt will not have any changes to their retirement, health insurance, or leave accrual rate.

I am an A/P faculty employee impacted by the FLSA threshold changes. Will my employee type change if I am reclassified to non-exempt?

No. Positions currently classified as A/P faculty will remain A/P faculty regardless of if pay is increased or the position’s FLSA exemption status is changed to non-exempt. Non-exempt A/P faculty will be placed in a new leave category that will require hours worked to be tracked in the existing Leave and Time Worked Reporting System. This unique non-exempt A/P faculty classification is only to be used for current A/P faculty moving into a non-exempt status as a result of the FLSA Jan. 1, 2025, update. All future non-exempt positions must be hired as staff or wage.

Where can I find more information?

Visit the FLSA pages on the HR site for more information on these changes.  

When will employees be notified of FLSA classification or pay changes?

It is important to note that the implementation of the FLSA Jan. 1 2025, salary threshold is subject to potential legal challenges that may delay or modify the final rule. To account for these developments, impacted employees will receive official communication of any changes to their position in early January 2025.

Salary thresholds

On July 1, 2027, and every three years thereafter, the threshold will be automatically increased. 

For additional questions, contact your HR Representative or HR's Compensation Team at compensation-g@vt.edu.