FTC Issues Final Rule Banning Employee Noncompete Agreements

On April 23, 2024, the Federal Trade Commission (FTC) issued its final rule prohibiting non-compete agreements, with some limited exceptions. The rule has already begun to face legal challenges, and if the rule does ultimately take effect, the earliest effective date would not be until at least late August 2024. Once effective, the rule would prohibit employers from entering into non-compete clauses with workers and enforcing existing non-compete agreements, unless they cover certain senior executives (workers who earn more than $151,164 annually and are in policy-making positions). Additionally, employers will need to provide notice to covered current and former workers that their non-competes are no longer enforceable.

Although there is no immediate action required, employers should review their non-compete agreements and discuss potential next steps with their employment counsel.

EEOC Issues Final Rule On Implementing the Pregnant Workers Fairness Act

The Equal Employment Opportunity Commission (EEOC) recently issued final rules regarding the implementation of the Pregnant Workers Fairness Act (PWFA), which originally took effect in June 2023. The final rules cover lactation support and other accommodations for expectant workers, including fertility and abortion care. The PWFA applies to employees and applicants and requires employers to provide accommodations for current, past, and potential pregnancy-related medical conditions, including miscarriage, abortion, and postpartum complications. The PWFA requires employers to provide reasonable accommodations similar to those under the Americans with Disabilities Act (ADA). Unlike the ADA, the PWFA may also require such accommodations on a temporary basis, even if the essential functions of the job cannot be performed. 

Employers should review and revise their policies and processes related to medical conditions covered under the PWFA and reasonable accommodations accordingly.

Department of Labor Finalizes Salary Threshold Increases for Overtime Exempt Employees

On April 23, 2024, the U.S. Department of Labor (DOL) released final rules regarding the minimum salary threshold to qualify for certain minimum wage and overtime exemptions under the Fair Labor Standards Act (FLSA), adjusted from those originally proposed in August 2023. The first salary requirement increases will take effect on July 1, 2024, bringing the minimum weekly salary to $844 (or $43,888 per year) for the executive, administrative, and professional (EAP) exemptions and to $132,964 per year for the highly compensated employee (HCE) exemption. Additional increases for the EAP and HCE exemptions will be effective January 1, 2025. The final ruling also requires future minimum exempt salary updates every three years, as determined by US wage data.

Employers should work closely with their employment counsel on how to prepare and comply with the new minimum exempt pay requirements for their specific employee population. Justworks PEO customers can access our in-house HR Consultants to discuss strategies for manager training and employee communication.

CDC Issues New Covid Guidelines for Return to Work

The Centers for Disease Control and Prevention (CDC) has updated its isolation guidance for COVID-19 cases. The updated guidance states that individuals who test positive for COVID-19 no longer need to isolate if they have been fever-free for 24 hours and have mild and/or improving symptoms. Employers may need to update their policies to reflect these changes, and should keep an eye on any other requirements that apply to their industry or area.

U.S. Department of Labor Publishes Final Rule on Independent Contractor Status

On January 10, 2024, the U.S. Department of Labor (DOL) released a final rule, effective March 11, 2024, that revises their prior guidance on how employers should analyze whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). 

This analysis includes the following factors: opportunity for profit or loss depending on managerial skill, investments by the worker and the potential employer, the degree of permanence of the work relationship, the nature and degree of control, the extent to which the work performed is an integral part of the potential employer's business, and skill and initiative.

Employers can read more on the final rule and analysis here.  Employers should seek legal counsel if they have any questions regarding their classification of workers.

Department of Labor Proposes Salary Posting Requirements for Federal Contractors

On December 4, 2023, the Federal Acquisition Regulatory Counsel (FAR) submitted a “Pay Equity and Transparency in Federal Contracting” proposal to the Office of Management and Budget (OMB) for approval. 

On January 11, 2024, the OMB approved this proposal and the FAR subsequently released the Notice of Proposed Rulemaking (NPRM).

The proposed rule would generally prohibit contractors and subcontractors from inquiring about salary history for job applicants working on or in connection with a government contract. It would also require contractors and subcontractors to disclose the compensation and benefits in job postings involving work on or in connection with a government contract.

Employers should remain close to updates as the proposed rule goes through the final review process.

Minimum Pay Updates: 2024

The new year will bring changes to minimum wage and exempt employee salary requirements in many jurisdictions. Employers are encouraged to review employee compensation to ensure compliance with these annual changes.

2022 EEO-1 Component 1 Data Collection

On October 31, 2023, the Equal Employment Opportunity Commission (EEOC) announced that the 2022 EEO-1 Component 1 data collection opens for mandatory filing for private sector companies with 100 or more employees and federal contractors with 50 or more employees meeting certain criteria. The deadline to file is December 5, 2023. 

For Multi-Establishment Employers: An employer with more than one establishment will need to file a Consolidated Report, a Headquarters Report, and Establishment-Level Report(s). The Establishment-Level Reports replace the Type 4, and Type 8 reports. Justworks will continue to reach out to customers who may be impacted to provide resources to help with report submission.

Updated Form I-9

As previously covered, effective August 1, 2023, the U.S. Citizenship and Immigration Services (USCIS) released a new Form I-9 to verify identity and employment authorization. 

The new version of Form I-9 will be available for Justworks customers to use by October 31, 2023. All employers must use the new form to verify employment authorization beginning November 1, 2023.

U.S. Department of Labor Proposes Raising Minimum Salary Level for “White Collar” and Highly Compensated Employee Overtime Exemptions

On August 30, 2023, the U.S. Department of Labor (DOL) proposed a rule that would increase the federal minimum salary level for those eligible under the “white collar” and highly compensated employees (HCEs) overtime exemption regulations. Under the proposal, the minimum salary level is anticipated to change from $684 per week ($35,568 annualized) to at least $1,059 per week ($55,068 annualized) for “white collar” exempt employees and from $107,432 to at least $143,988 for HCEs. The DOL, however, has indicated that the salary floor may ultimately be even higher than $55,068 to meet the “white collar” exemption.

Additionally, the DOL is calling for the minimum salary thresholds of both “white collar” exempt and highly compensated employees to be adjusted every three (3) years. It is important to understand that the proposal released by the DOL is not yet law. Comments on the proposal are due by November 7, 2023, and the DOL will consider all comments received before publishing a final rule. However, at this time, employers should consider reviewing their employees’ exemption status and salary levels to assess the impact of these potential changes.

USCIS Releases Updated Form I-9 and Remote Verification for Eligible Employers

On August 1, 2023, the U.S. Citizenship and Immigration Services (USCIS) released a new Form I-9 to verify identity and employment authorization. Employers may use the previous version of Form I-9 until October 31, 2023. Starting November 1, 2023, the new Form I-9, which is designed to be more user-friendly, must be used to verify employment authorization.

Additionally, the Department of Homeland Security (DHS) announced an alternative procedure for Form I-9 supporting document examination, which allows qualified E-Verify employers to utilize remote inspection of documents, if certain qualifications are met.