Federal Overtime Exemption Salary Requirements Overhauled and Nationwide Noncompetition Agreement Bans: What You Need to Know

Description

HR Roundtable Discussion

Huge Changes to Federal Overtime Exemption Salary Requirements and Nationwide Bans on Noncompetition Agreements – Be Prepared!

At this Roundtable, we will discuss the elements of both final rules and what your company should be doing to ensure compliance and protect itself from claims. In the meantime, links to Client Alerts discussing the DOL and FTC final rules are available here https://www.psh.com/new-salary-thresholds-will-impact-employers-regardless-of-legal-challenges/ and https://www.psh.com/ftc-issues-clumsy-overbroad-noncompete-rule/.

On April 23, 2024, both the federal Department of Labor (DOL) and Federal Trade Commission (FTC) issued Rules that may have a huge impact on employment law compliance for local businesses. First, the DOL announced a final rule increasing the salary threshold employers must pay to most exempt workers. The threshold will go up by over 65% by the end of the year, from $35,568 now to $43,888 on July 1, to $58,656 on January 1, 2025. These changes are said to impact over 4 million workers and per the DOL itself, will result in $1.4 billion in direct costs to employers. 

Not to be outdone, the FTC announced a final rule banning employers from entering into new non-compete agreements and requiring employers to provide notice to workers who are bound by non-competes that they will not be enforcing the non-competes against them, with the exception of existing agreements with senior executives. The ban is very broad, and included in the definition of a “non-compete clause” are any terms or conditions of employment that penalize workers for competing or “function to prevent workers from competing.” While both rules may be delayed or struck down before going into effect following legal challenges, employers are well advised to get up to speed on the development to avoid unnecessary risk to their organizations, regardless of whether the rules survive judicial scrutiny.

Attorneys Michael Gamboli and Morgan Hedly from Partridge Snow & Hahn will lead the Roundtable and all Chambers members are invited to attend and participate in what is sure to be a lively discussion!