By SUSAN JONES
A new Biden administration policy that would have raised the salary threshold that partially determines who is eligible for overtime was put on hold in mid-November when a federal judge in Texas blocked it.
But Pitt intends to stick with the higher threshold that was established in July, even though the judge’s ruling effectively sets the salary bar at its previous level of $35,500 per year.
The U.S. Department of Labor’s Fair Labor Standards Act (FLSA) requires employers to pay employees overtime for working more than 40 hours a week, but it exempts workers that meet three criteria: They must be salaried; must do executive, administrative or professional duties; and must earn over a certain minimum salary.
On July 1, that salary was set at $43,888 annually. At that time, about 425 Pitt employees who earned less than the new threshold and who were previously classified as overtime exempt became overtime eligible, or non-exempt. The University made the change for all employees working in jobs below Pay Grade 5, which aligns closest to that new minimum threshold, James Gallaher, vice chancellor for human resources, said in July.
Last month’s ruling “will not affect any of the University’s changes in exemption status and/or compensation previously made in July 2024 as the result of prior increases to the minimum salary threshold,” the Office of Human Resources said in a statement.
The 2024 Rule from the Department of Labor also provided for periodic, automatic increases going forward, including one that would have raised the threshold to $58,656 annually starting Jan. 1, 2025. This change would have impacted around 4 million workers, the department estimated.
The University said that given the recent ruling, it will not implement the January change.
The ruling by U.S. District Judge Sean Jordan, of the Eastern District of Texas, was in a case brought by the state of Texas and a coalition of trade associations and employers.
Jordan said that the overtime exemption rules requires that an employee’s status be determined by duties rather than salary, and because the 2024 Rule’s changes “make salary predominate over duties for millions of employees,” that it exceeded the Department of Labor’s authority, according to the National Law Review.
Last week the Labor Department appealed the decision, but it is unclear if the incoming presidential administration will want to pursue the appeal.
The federal Department of Labor overtime rule changes are separate from and will have no impact on the Fair Labor Standards Act calibration project the University undertook earlier this year. This project changed the exemption statuses for a relatively small group of employees due to job status changes under Pitt’s compensation modernization project.
If employees have questions about their FLSA exemption status, they should submit an online inquiry with the Office of Human Resources.
Susan Jones is editor of the University Times. Reach her at suejones@pitt.edu or 724-244-4042.
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