UAB & the U.S. Fair Labor Standards Act

The U.S. Department of Labor recently announced a change to the criteria for determining employees’ status as nonexempt (bi-weekly) or exempt (monthly) under the Fair Labor Standards Act (FLSA). This is not a UAB decision; it is a federal law all employers must follow. The final rule has a two-part implementation — on July 1, 2024, the new minimum salary threshold for exempt employees will move from $35,568 to $43,888 (effective for the pay period beginning June 30, 2024), and on January 1, 2025, the minimum threshold will increase to $58,656.

If these minimum compensation thresholds fall above the minimum/maximum range for the UAB position’s pay grade, the position must transition to nonexempt (bi-weekly) on the dates listed above. While this would require some individuals to begin “clocking in/out” as nonexempt (bi-weekly) employees and thereby become eligible for overtime pay, their compensation will remain unchanged if they work their scheduled hours. The change from exempt to nonexempt will not affect current benefits.

UAB Human Resources is currently assessing the impact of this change on individual employees and/or positions while proactively strategizing to minimize disruptions. Strategies may include limited salary increases, pay grade changes and/or employees transitioning from exempt to nonexempt status. Impacted employees will be notified by June 3, 2024.