Purdue and FLSA
Purdue is subject to and manages its compensation program in compliance with the Fair Labor Standards Act (FLSA). The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments. For a full overview of the federal law, refer to the DOL Wage and Hour Division's FLSA assistance page. The 2024 FLSA Updates are outlined below.
OVERTIME PAY ELIGIBILITY
The piece of the Act that employees and managers are usually most interested in is overtime pay eligibility. Employees working in excess of 40 hours per week are required to be paid overtime premium pay, unless they qualify as exempt from the FLSA requirement. To be considered exempt, employees must satisfy a “minimum salary” and “duties” test based upon job responsibilities. Generally, positions in the Administrative and Operational Support, and Police, Fire and Skilled Trades career streams are non-exempt. Positions in the Professional, Management and Executive career streams are exempt.
THE EXEMPTION TEST
Any employee who earns less than a minimum salary rate established by the Department of Labor is automatically non-exempt under the FLSA regardless of job duties. The minimum salary rate is $684/week unitl July 1, 2024. The earnings threshold cannot be pro-rated for part-time employment. Whether employed on a full-time or part-time basis, employees must make more than the FLSA earnings threshold to be considered exempt. If an employee has multiple salaried appointments that are individually exempt based on job responsibilities, the salaries are combined to determine whether or not the salary threshold is met.
In addition to a minimum salary threshold, to qualify for exemption employees generally must meet certain tests regarding their job duties. Job titles do not determine exempt status. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the FLSA regulations. There are five primary exemption tests utilized to determine if a position is exempt from the overtime payment requirements:
- Executive Test
- Administrative Test
- Professional Test
- Outside Sales Test
- Computer Test
If a position does not meet any of these exemptions, it is then considered to be non-exempt under FLSA and subject to the pay practices outlined in the act.
Note, if an employee’s duties and pay change, or if the regulations are updated, that person’s FLSA status may change from exempt to non-exempt. Additionally, FLSA regulations explicitly exclude certain employee groups from the overtime pay rules regardless of duties and salary. These employee groups include, but are not limited to, teachers, physicians, and attorneys. These employee groups are not eligible for overtime pay.
2024 FLSA Updates
The Department of Labor (DOL) announced a proposal in August 2023 to increase the minimum salary threshold needed to qualify exempt workers under the Fair Labor Standard Act (FLSA). The final ruling was published on April 23, updating the FLSA overtime regulations. The rule goes into effect July 1, 2024.
Effective July 1, the current salary minimum for exempt employees is changing from $35,568 per year to $43,888 annually. On Jan. 1, 2025, the salary threshold will increase to $58,656. Beginning July 1, 2027, the salary threshold will update every three years, by applying up-to-date wage data to determine the new salary levels.
Changes will apply to exempt employees doing executive, administrative or professional work as defined by the DOL. Faculty and other employees primarily engaged in an instruction role, coaches and student employees fall into other exemption categories. Please review the following resources for additional information.