Employment Law 2024 Updates: Overtime Rules, PWFA Regulations, and FTC Noncompete Ban
It’s important to stay ahead of the curve with the latest pivotal changes in employment law. From the Department of Labor’s new overtime pay thresholds, significant regulations under the Pregnant Workers Fairness Act, to a sweeping ban on noncompete agreements, here are the most important employment law changes to know in 2024.
Overtime Exemption Changes
On April 23, 2024, the Department of Labor (DOL) announced a final rule that significantly raises the salary threshold for overtime exemptions under the Fair Labor Standards Act (FLSA). Beginning July 1, 2024, the salary threshold for the overtime exemption will increase to $43,888.00 and then to $58,656.00 on January 1, 2025. This rule also raises the overtime salary threshold for highly compensated employees. On July 1, 2024, the threshold raises to $132,964 with an increase to $151,164.00 in January 2025. Employers should review the salaries of current employees to ensure they comply with these new rules. If they don’t, it’s crucial that the necessary adjustments be made to stay at these thresholds.
Updates on the Pregnant Workers Fairness Act
On April 19, 2024, the Equal Employment Opportunity Commission (EEOC) published final regulations concerning the implementation of the Pregnant Workers Fairness Act (PWFA). The PWFA requires employers to offer reasonable accommodations for “known limitations” tied to pregnancy, childbirth, or related conditions, unless it would create an undue hardship for the employer. A significant aspect of the final rules is that they include employee decisions to have or not have an abortion as a pregnancy or related condition. The EEOC’s rule is currently being challenged in Federal Court arguing that the EEOC unconstitutionally exceeded the PWFA. Employers should monitor the developments of the challenges to the EEOC rule and ensure they have rules in place to comply with the EEOC’s rule concerning the PWFA.
FTC’s Ban on Noncompete Agreements
On April 23, 2024, the Federal Trade Commission (FTC) voted to ban noncompete agreements for employees across most sectors, only exempting senior executives. We previously discussed this new rule here. The FTC’s new rule prohibits employers from: (1) entering a noncompete clause; (2) enforcing or attempting to enforce a noncompete clause; and (3) representing third parties where an employee/former employee is the subject of a noncompete clause.
As expected, the FTC’s ban on noncompetes has triggered various lawsuits from businesses, including the U.S. Chamber of Commerce, challenging the FTC’s authority to enact such broad regulations. Filed in federal courts in Texas, these lawsuits argue that the FTC’s rule exceeds its powers under the Federal Trade Commission Act and represents a significant overreach into traditional business practices. Critics also highlight the logistical and economic issues of retroactively applying the ban, which could invalidate existing agreements and disrupt established compensation structures. These legal challenges are expected to delay the ban’s implementation, which is currently set to take effect in 120 days from its announcement.
Walker R. Lawrence is a shareholder in Levin Ginsburg’s employment law practice and is a trusted counselor for employers. Walker has extensive experience representing employers in employment litigation. Roenan Patt is a partner in Levin Ginsburg’s business litigation and trial practice group and has extensive experience with disputes involving small and mid-size businesses. If you have any questions about business disputes or the types of records a company should maintain in anticipation of a potential lawsuit, please contact Walker or Roenan through our website.
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