Federal Changes: FLSA, Pregnancy & Noncompete

1 week ago

The Feds have been busy. As we approach the end of April, three major changes affecting employment law have been published. The three changes are in relation to:

Increases in the exemption threshold for purposes of overtime
Final Regulations released this month on the Pregnant Workers Fairness Act which was enacted last year.
Final Rule to ban Non-Compete agreements

The first one is the most sweeping and will require that organizations begin planning staffing needs and fiscal impacts due to the changes in the Fair Labor Standards Act threshold for exemption from the overtime provisions of the Act.

The current salary exemption level is $684 per week or $35,568 per year. This means that if the employee is paid a salary, they perform primarily executive, administrative, or professional duties, according to Department of Labor (DOL) regulations, and they make a salary level meeting the required threshold, the employer does not to pay overtime to an employee for having worked over 40 hours in a week. This newly published final rule will increase that threshold to the following amounts in two phases:

July 1, 2024: $844 per week ($43,888 per year)
Jan. 1, 2025: $1,128 per week ($58,656 per year)

Certain highly compensated employees may also be exempted based on salary. The exemption for the total annual compensation level will increase from $107,432 per year to:

July 1, 2024: $132,964 per year
Jan. 1, 2025: $151,164 per year

The salary thresholds will be updated every three years, starting July 1, 2027.

The Federal Trade Commission (FTC) Proposed Final Rule related to non-compete agreements, will significantly limit an employer’s ability to have employees who leave employment sign these agreements which restrict their ability to perform certain work after leaving your organization. While this has not yet been finalized, employers will want to be prepared for the potential impact to their businesses.

Under the Pregnant Worker Fairness Act (PWFA) employees with at least fifteen employees must provide reasonable accommodations to qualified employees and applicants for limitations around pregnancy. While this Act became effective last year, the Final Rule was not issued until April 15, 2024 and it was published in the Federal Register on April 19, 2024. It will become effective on June 18, 2024.

We will be providing more in-depth information in the weeks to come. If you need Human Resources expertise or additional HR resources to support your existing HR staff, we can help you at Southwestern HR Consulting (SWHRC). Contact SWHRC today at the link above to talk to find out about our services and our team of experts.