2025 FLSA Salary Basis Threshold

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February 24, 2025

DEANS

RE: 2025 FLSA Salary Basis Threshold

Dear Colleagues:

On November 15, 2024, a Federal Judge vacated the Department of Labor’s Fair Labor Standards Act (FLSA) April 2024 final rule on overtime exemptions. The Department of Labor (DOL) had issued revised regulations on April 23, 2024, that increased the minimum salary threshold for overtime-exempt employees to $844 per week effective July 1, 2024, and to $1,128 per week effective January 1, 2025. The Federal Judge reinstated the minimum salary threshold, which had been in effect since January 1, 2020.

All faculty, including lecturers, as well as other teaching titles, will be unaffected by this rule regardless of how much they earn because the minimum salary threshold does not apply to those who have the primary duty of teaching and imparting knowledge. Additionally, the DOL does not consider undergraduate and graduate students engaged in research and extracurricular activities employees and therefore they are not subject to minimum wage or overtime provisions of the FLSA. Non-faculty, non-student academic appointees in research or administrative positions, however, must meet both the duties test and salary test.

Pursuant to the revised overtime rule that had taken effect on July 1, 2024, non-faculty, non-student academic appointees in research or administrative positions making less than $844 each week (equivalent to $43,888 per year for a full-year employee) regardless of the number of days or hours worked were reclassified to non-exempt status.

With the reinstatement of the January 1, 2020 minimum salary threshold, and following consultation with Systemwide Labor Relations, the University has decided to retain the $844 per week threshold that was put into effect on July 1, 2024, for academic appointees.

Both full-time and part-time academic appointees must earn at least $844 per week to remain exempt. Academic appointees who do not meet both the salary threshold and the duties test will be reclassified to non-exempt overtime eligible.

Separately, academic appointees that meet the definition of a “covered health care employee” and provide patient care, health care services, or services supporting the provision of health care in the following titles: Medical Residents and Interns, Dental Residents, Non-Physician Clinical Trainees, and Clinical Psychology Interns, are subject to the minimum salary thresholds under California Senate Bill 525 (SB 525). SB 525 set a new hourly minimum wage for health care workers and a new exempt minimum wage (which is the greater of 150% of the new health care worker minimum wage for a full- time exempt employee or 200% of the regular California minimum wage). While the enactment of this law was delayed until October 2024, academic appointees were reclassified to non-exempt status and/or had their salaries raised to meet the new minimum wage ($23/hour) or exempt threshold ($71,760/year) effective June 1, 2024, per the initial requirements in the law.

If you have any questions, you may contact the Academic Personnel Office at apo@ucsc.edu.

Sincerely,

Grace McClintock
Assistant Vice Provost, Academic Personnel

cc:
Divisional Coordinators
Divisional AHR staff
Labor Relations
Academic Personnel