On April 23, 2024, the Federal Trade Commission (FTC) voted to issue a final rule that would prohibit employers from entering into or enforcing noncompete clauses with most employees. The final rule was published in the Federal Register on May 7, 2024, and is scheduled to take effect 120 days after such date on Sept. 4, 2024. 

Subject to very limited exceptions, the final rule provides that:

• The use of noncompete clauses will be banned as of the effective date;
• Any existing noncompete clauses (other than those entered into with senior executives) will be invalidated;
• Employers must notify all employees (other than senior executives whose existing noncompete agreements will remain enforceable) that their existing noncompete agreements will not be enforced.

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On April 23, 2024, the U.S. Department of Labor (DOL) announced a final rule to amend current requirements employees in white-collar occupations must satisfy to qualify for an overtime exemption under the Fair Labor Standards Act (FLSA). The final rule will take effect on July 1, 2024.

Increased Salary Level – The FLSA white-collar exemptions apply to individuals in executive, administrative, professional, and some outside sales and computer-related occupations. Some highly compensated employees may also qualify for the FLSA white-collar overtime exemption. To qualify for this exemption, white-collar employees must satisfy the standard salary level test, among other criteria. This salary level is a wage threshold that white-collar employees must receive to qualify for the exemption.

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Delaware Releases New Regulations for PFML Program – The Delaware Department of Labor has issued a second round of regulations for the state’s paid family and medical leave (PFML) program, which will begin providing leave benefits on Jan. 1, 2026.

Read more: Delaware Legal Update

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The Fair Labor Standards Act (FLSA) provides minimum wage and overtime pay protections to most employees. Employees generally must be classified as “non-exempt” and, therefore, be eligible for such minimum wage and overtime protections unless they meet the criteria to be classified as “exempt” from minimum wage and overtime requirements. Typically, only employees in certain positions who meet certain salary and job duties criteria set forth under the FLSA may qualify for an exemption.

Periodically, employers may be required to reclassify exempt employees as non-exempt, such as following a legal change to the exemption criteria or upon discovery that an employee is misclassified as exempt. Employers may also choose to reclassify employees as non-exempt to serve other business purposes.

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In early March 2024, the U.S. Department of Labor’s (DOL) proposed overtime rule, announced in August 2023, entered its last stage of review. Publication of the final rule is expected soon. The rule would amend the requirements that employees in certain white-collar occupations must satisfy to qualify for an overtime exemption under the Fair Labor Standards Act (FLSA).

The FLSA white-collar exemptions apply to individuals in executive, administrative, and some outside sales personnel and computer-related occupations. Some highly compensated employees (HCEs) may also qualify for a FLSA white-collar exemption. To qualify for most white-collar exemptions, employees must meet the specified salary threshold, among other criteria.

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President Joe Biden’s proposed budget for fiscal year 2025 includes a national paid family and medical leave program and urges Congressional action on mandatory paid sick leave.

Paid Family and Medical Leave – Biden’s budget would establish a national paid family and medical leave program that would be administered by the Social Security Administration and provide workers with progressive, partial wage replacement to take time off for family and medical reasons. More specifically, the president’s plan would provide up to 12 weeks of leave for eligible workers to:

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Employers of all sizes continue to face attraction and retention challenges. Successful efforts to win over workers can require significant time and carry high costs, but failing to attract talent or losing existing employees is particularly costly for small businesses. Unfortunately, small businesses often don’t have the excess resources to invest in attraction and retention efforts in today’s labor market, making it difficult to compete with larger organizations. Along with the costs associated with recruiting, hiring, and training, attraction and retention struggles can significantly impact workplace operations and culture, especially in a smaller environment. For these reasons, small businesses cannot afford to ignore their attraction and retention efforts.

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An increasing number of employees are recording their termination meetings with HR representatives, managers, and supervisors and posting them on various social media platforms, including TikTok, Instagram, and Twitter. These videos, commonly called “Watch Me Get Fired” videos, have become a trend among workers in various industries, including fast-food employees, office workers, and teachers. In some cases, these videos have gone viral, exposing businesses to heavy reputational backlash and sometimes legal consequences due to substandard termination practices. Despite the high stakes organizations face, some employers are still mishandling terminations.

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District of Columbia Enacts New Wage Transparency Requirements – On Jan. 12, 2024, the District of Columbia (the District) enacted the Wage Transparency Omnibus Amendment Act of 2023, amending the Wage Transparency Act of 2014. The amended law requires pay and benefits disclosures, prohibits wage history inquiries, and expands employee protections regarding compensation discussions. The amended law takes effect on June 30, 2024, and applies to all nongovernmental employers with at least one employee in the District.

Read more: District of Columbia Legal Update

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The Centers for Disease Control and Prevention’s (CDC) new guidance that individuals no longer need to isolate from work for five days following a positive COVID-19 test may raise questions with employers about what leave they are required to provide to employees with the virus.

The revised guidance, issued March 1, 2024, advises that people who are sick with COVID-19 or another respiratory virus stay home and away from others. However, isolation is not necessary if an individual with COVID-19 has been fever-free for at least 24 hours without medication and their symptoms are improving. The guidance states that the period people should stay home and away from others could be shorter, the same, or longer than the previous guidance for COVID-19 isolation. The new guidance is not applicable to healthcare settings, which have their own CDC recommendations.

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