By SUSAN JONES
A new Biden administration policy will raise the salary threshold that determines who is eligible for overtime, which will initially impact about 425 Pitt employees, the Office of Human Resources said.
Starting July 1, anyone earning less than $43,888 annually will be entitled to overtime pay if they work more than their regular hours. This is a big increase from the previous threshold of $35,500 per year.
Any employees earning less than the new threshold who were previously classified as overtime exempt are now becoming overtime eligible, or non-exempt.
“To be fair and consistent in how we apply this new salary threshold, the University is implementing this change for all employees working in jobs below Pay Grade 5, which aligns closest to that new minimum threshold,” said James Gallaher, vice chancellor for human resources.
All the employees impacted by this change were recently notified by email from the University's Compensation Department. They will go from being a salaried employee to being paid as an hourly employee. While this will not change their job duties, responsibilities or annual pay, it will result in them being paid bi-weekly, instead of monthly, and will require them to submit weekly timecards. Benefits taken out through payroll also will be deducted differently. Details about this and other facts about the change are available with a Pitt sign-on in a Frequently Asked Questions document.
Then on Jan. 1, 2025, there is an additional scheduled increase in the minimum salary threshold to $58,656. “The University is not taking any current action on this future increase until we get closer to that date, allowing for potential legal challenges to be addressed,” Gallaher said.
The federal Department of Labor overtime rule changes are separate from the Fair Labor Standards Act calibration process the University undertook earlier this year, he said.
“The changes in FLSA exemption status for impacted employees due to the earlier calibration process were University-driven; put into place proactively by the University to address changes in positions due to compensation modernization,” Gallaher said. “The coming changes in FLSA exemption status are government-driven; based on the Department of Labor’s increase to the minimum salary threshold test for overtime exemption.”
Overall, more than 4 million Americans will be impacted by the new Labor Department rules by next January.
Susan Jones is editor of the University Times. Reach her at suejones@pitt.edu or 724-244-4042.
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