Implementation of New Overtime Rules

 November 13, 2019

TO:Vice Presidents, Vice Provosts, Deans, Directors, Department Heads, and Managers
FROM:Kyle Cavanaugh, Vice President for Administration
RE:Implementation of New Overtime Rules

As announced in September, the Department of Labor has introduced new regulations that will expand eligibility for overtime to specific positions that are compensated less than $35,568 per year, effective Jan. 1, 2020.

Since that time, Duke has been working to assess the impact and develop plans for how best to transition impacted staff members currently in exempt positions making less than $35,568 to non-exempt status in compliance with the new federal regulation.

Our goal in this process has been to limit the individual, operational, and fiscal impact, while meeting the Department of Labor requirements.

There are less than 100 staff members within the University and the Health System who currently have salaries that are less than the $35,568 threshold and may be impacted. As required under the new regulations, they will be considered to hold a non-exempt position and be eligible for overtime effective Jan. 1, 2020. Overtime must be approved in advance by the staff member’s manager. For this change, the initial determining factor of whether a position will be considered exempt or non-exempt will be the Department of Labor’s new salary threshold of $35,568.

All staff affected by this change will be moved to the biweekly payroll on Jan. 1, 2020. In order to assist with cash flow issues related to the transition, staff affected by the change will also receive a supplemental payment equivalent to two week’s pay (one biweekly payment) in their Jan. 17, 2020, paycheck.

Duke will retain the current vacation/paid time off accrual rates for these staff. Impacted and eligible staff will move into the Employees’ Retirement Plan (ERP) effective January 1, 2020. The ERP is a traditional pension plan paid entirely by Duke and is designed to provide an employee with a guaranteed monthly income at their retirement. Eligible non-exempt employees can continue to make voluntary contributions to the Faculty and Staff Retirement Plan but will be ineligible to continue to receive the employer’s contribution to that plan.

In order to support staff and managers with more information about this change, we have developed a brief video and a comprehensive list of answers to common questions to assist you and your staff. For more information, visit the Duke Human Resources website.

Additional information, including a preliminary list of staff affected by this change, will be sent to the Management Centers and Health System entities over the next few days. Once the list has been reviewed and confirmed, additional materials will be distributed to assist in the transition. Thank you for your assistance in this important process.