The US Department of Labor has mandated a change in the pay threshold for exemption from overtime under the Fair Labor Standards Act (FLSA), effective December 1, 2016. In order for the City of Houston to be in full compliance with the new exempt threshold of $47,476, we need to implement any necessary program changes to be effective no later than November 19, 2016. There are approximately 101 employees in grades 19 and below who will transition from exempt to nonexempt as a result of this change.
A. Change the civilian pay grade structure
The Human Resources Department recommends amending the current civilian pay grade structure (Exhibit A), which establishes pay ranges for each pay grade, to reflect changes in regulations issued by the US Department of Labor.
1) Increase the minimums of pay grades 20, 21 and 22 to $47,476/yr. ($1,826 biweekly) in line with the new exempt threshold. This will enable the City of Houston to maintain the current exemption status of jobs in these grades. The range minimums would change as follows (Exhibit B):
a. Minimum of grade 22 from $1,776 to $1,826
b. Minimum of grade 21 from $1,690 to $1,826
c. Minimum of grade 20 from $1,609 to $1,826
2) Decrease the maximums of grades 20, 21 and 22 (Exhibit B) such that the midpoints of grades 20, 21 and 22 will not change. This is necessary because of commitments that were made in the 2015 HOPE meet-and-confer agreement that salary range midpoints would not change for the term of the contract.
HR will coordinate communication with the affected departments and employees to ensure a smooth transition. The last civilian pay structure change was approved July 22, 2015. Master Pay Structure changes are attached as Exhibits A and B. There are no changes necessary for the Police or Fire Pay Exhibits.