TO: Principal Investigators and/or their Designee, Project Administrators, and Fiscal Administrators
FROM: Nelson Sakamoto, Director of Human Resources
The Department of Labor (DOL) changed the Salary Level Test (e.g., the Minimum Salary Level) for an Exempt (from overtime compensation) classification. The Salary Level Test is one of three requirements under the FLSA to qualify for an Exempt classification. These three requirements are:
- Salary Basis Test: The employee must be paid at a predetermined and fixed salaried rate that is not subject to reduction because of variations in the quality or quantity of work performed.
- Salary Level Test: The amount of salary paid must meet a minimum specified amount.
- Duties Test: The employee’s job duties must meet the FLSA exemption standards for an Executive, Administrative, or Professional exemption.
Effective January 1, 2020, the Salary Level Test will increase from $455 to $684 per week ($2,964 per month or $35,568 annually). This represents a 49.23% increase in the FLSA’s Salary Level Test. The FLSA requires an Exempt employee to be paid no less than $684.00/week or $2,964.00/month. This minimum pay rate cannot be prorated regardless of the employee’s FTE.
Effective January 1, 2020, the RCUH has revised the Minimum Pay Rates for the Exempt Pay Ranges (Attachment No. 1). Example: Exempt Pay Range E17 current Minimum Monthly Pay Rate is $2,528.00/month. The new minimum for Exempt Pay Range E17 will be $2,964.00/month. This change also affects any pending recruitments and new hires. All new hires must be paid at these new minimums of the applicable job’s pay range.