SUBJECT:
Title
Request Approval to Increase the Minimum of Pay Grade 112 to $58,656 and Change Pay Grades for 60 Positions, in Compliance with The United States of Department of Labor Overtime Regulations
Body
INITIATOR: DEPARTMENT:
Sara Caron, Director Human Resources
DESCRIPTION/BACKGROUND:
On April 23, 2024, the US Department of Labor (Wage and Hour Division) announced the final rule updating the overtime regulations.
The Department of Labor’s final overtime rule updates the salary level required for exempt (salaried) level workers to ensure that the Fair Labor’s Standards Act intended overtime protections are fully implemented, including state and local governments.
The final rule updates the salary threshold under which most exempt workers are entitled to overtime. Based on the new rule employers have the option of raising workers’ pay to the new minimum and leaving the employee exempt from overtime or changing the workers status to non-exempt (hourly).
Prior to July 1, 2024, the overtime threshold amount was $35,568 annually. Any employee making less than that amount would earn overtime or compensatory time. The new changes have two phases:
Effective July 1, 2024, the threshold was increased to $43,888 annually. 17 positions were affected by this change, with no budget impact.
Effective January 1, 2025, the threshold will increase to $58,656 annually. This threshold will affect 183 positions.
Over the past several months the Human Resources Director, together with the Fiscal Manager, Administration and Department Directors have evaluated the exempt positions within Marion County. The recommendations from the findings are detailed in the attachments.
Based on analysis and feedback, 64 positions will transition from Exempt status to Non-Exempt status.
For positions currently in pay grade 112, the most cost effective and strategic approach is to increase the minimum of pay grade 112 to $58,656, which would affect 59 positions. The budget impact of this change would only affect 14 positions, as most are currently paid above the new threshold.
Specifically, four filled positions, and 10 new vacant positions (total of 14 positions), would increase to the new minimum of the pay grade, for a loaded cost of $24,132. All other pay grade 112 positions, are either vacant or currently paid over the new overtime threshold. Budget impact is $18,471 to General Fund, and $5,661 to other funds.
An additional 51 positions below the pay grade of 112, will have a pay grade change to pay grade 112 and remain exempt and 9 positions will have a pay grade change to address compression. Of the 60 positions, only 21 positions will have a budget impact of $88,223. Budget impact is $57,112 to General Fund, and $31,112 to other funds.
These changes would need to be in effect on the December 28, 2024 pay period start date.
BUDGET/IMPACT:
$112,355 (General Fund: $75,583; Other Funds: $36,773)
RECOMMENDED ACTION:
Recommended action
Motion to Approve Increase Minimum of Pay Grade 112 to $58,656, and Motion to Approve Pay Grade Changes of Listed Positions.
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