Understanding Exempt to Non-Exempt Changes
What is the FLSA?
The Fair Labor Standards Act, or FLSA, is the federal law that determines how employees may be paid, among other things, for hours worked in excess of forty (40) hours per week and whether or not they are subject to the minimum wage and overtime.
Exempt status: Exempt employees are salaried employees paid on the monthly payroll and are not subject to the minimum wage and overtime provisions of the Fair Labor Standards Act.
Non-exempt status: Nonexempt employees are paid on an hourly basis and are subject to the overtime provisions of the Fair Labor Standards Act. Nonexempt staff employees are paid on the bi-weekly payroll and hours worked are tracked and recorded in the appropriate timekeeping system. They are entitled to premium compensation for overtime work.
Why is My Exemption Status Changing?
The U.S. Department of Labor (DOL) has increased the salary thresholds for overtime exemptions under the federal Fair Labor Standards Act, the federal law that governs overtime.
- Effective January 1, 2025: The new rule increases the minimum salary threshold for most exempt employees to $58,656 per year.
- To ensure compliance with this change, UNM will transition all Grade 11 and 12 exempt positions to non-exempt on January 1, 2025.
- Additionally, part-time positions in grades 13 and above with annual salaries below $58,656 will transition to non-exempt.
- Exempt employees who are not subject to the FLSA salary test (e.g. Teachers, Coaches, Physicians) are not affected by this change.
What's Changing?
Staff in pay grades 11 and 12 will transition from exempt to non-exempt, effective January 1, 2025. Once you are non-exempt, you will:
- Receive hourly pay instead of a salary and transition to a bi-weekly pay cycle
- Record hours worked, including start and end times, as well as leave
- Need pre-approval from your manager before working hours outside your normal schedule
- Receive overtime pay or compensatory (comp) time off:
- Overtime is paid at 1.5x your regular rate for hours over 40 in a workweek
- Alternatively, you may earn 1.5 hours of comp time for each overtime hour
- Hours worked for overtime calculation do not include paid leave, such as annual or sick leave.
- Holidays Observed at UNM count as hours worked and overtime/comp time will be accrued on these hours
- Overtime and comp time must be pre-approved by your manager.
What Stays the Same?
This transition to non-exempt status will not affect your:
- Job title or responsibilities
- Current base pay rate
- Benefit or retirement eligibility
- Professional role
Impacts to Benefits, Leave and Other Changes
Your benefit coverage will remain the same
View UNM’s Pay Schedule
Pay Schedules & Paycheck Impacts
- You will now receive 26 paychecks per year (biweekly) instead of 12 pay paychecks (monthly)
- Twice per year: You will receive three paychecks in one month
- Third paycheck: No voluntary decuctions (e.g., medical, dental, vision, or annuity) will be taken from this check
- Total annual base pay remains the same*, distributed evenly across 26 biweekly paychecks.
* Your total pay may fluctuate based on unpaid leave (reducing earnings) or overtime work (increasing earnings).
Overtime & Time Tracking Requirements
Review UNM’s policies to understand the procedures for managing and compensating overtime for non-exempt employees in compliance with FLSA:
Contact for Questions:
If you have questions about the FLSA transition:
- First, consult your supervisor.
- If further assistance is needed, email FLSA@unm.edu
