4 Must-Know HR Compliance Updates
The federal government has had a busy April! Here are 4 recent compliance updates for employers to be aware of.
April 2024, has resulted in significant HR compliance changes, including two (2) major updates just last week - the Federal Trade Commission (FTC) banned most new non-compete agreements and the Department of Labor (DOL) increased the pay threshold for exempt/salaried positions to maintain exemption from overtime.
The Equal Employment Opportunity Commission (EEOC) also recently dropped new guidelines on the Pregnant Workers Fairness Act and workplace harassment prevention.
All of this is on the heels of the new 1099 independent contractor rules that went into effect last month. (Hopefully, you’ve completed your review of 1099s vs. W-2s using the new 6-factor test!)
To help you navigate through the latest April 2024 changes, below is a summary of each change and step-by-step guidance on what to do next.
Overtime Protections Expanded
The White House announced the Department of Labor's (DOL's) final rule that expands overtime protections for millions of workers.
"Effective July 1, 2024, the salary threshold will increase to the equivalent of an annual salary of $43,888 and increase to $58,656 on Jan. 1, 2025."
The new rule also includes that..."The salary threshold will be automatically updated every three years starting on July 1, 2027."
Employees classified as exempt/salaried must both meet the duties test and the new salary threshold (above) to be considered exempt from overtime.
Next Steps
Now would be a good time to look at your current exempt employee classifications and associated salaries to see if a change may be needed either to increase salary or to change the classification to non-exempt/hourly.
Note that it is not generally advisable to have multiple similar positions with different classifications. For the sake of example, it wouldn't be advisable to have one full-time program coordinator classified as exempt and another full-time program coordinator with "like" duties and responsibilities classified as non-exempt. Not only the salary threshold and duties test, but the consistency in classification across similar jobs is important to keep in mind when conducting your review.
Here is a resource for additional guidance or book an HR strategy session to review your positions and get your specific questions answered.
FTC Bans Most Non-Compete Agreements
The FTC approved a rule banning most new employee noncompete agreements. The rule also makes existing noncompete agreements unenforceable and requires notification to existing agreement holders that the noncompete clause is unenforceable.
The rule goes into effect 120 days after the date of publication in the federal register. The ruling will likely be challenged in the courts.
Generally, restricting an employee’s ability to work for a similar employer isn’t a great practice from a recruitment, retention, and organizational culture perspective. Having strong policies and agreements around confidentiality, trade secrets, and in some cases, non-solicitation is what really matters.
Next Steps
If you have non-compete agreements in place, consult a legal representative to review and update your agreements and receive guidance on the notification requirement to existing agreement holders.
Review your confidentiality, trade secret, and non-solicitation policies; ensure they are in your handbook; and regularly review/discuss policies with employees.
EEOC Publishes Pregnant Workers Fairness Act Regulations
Last summer, the Pregnant Workers Fairness Act was passed, which is similar to the Americans with Disabilities Act (ADA), in that the Pregnant Workers Fairness Act (PWFA), expands protections for pregnant employees and applicants.
Employers with 15+ employees are required to engage in an interactive process with qualified pregnant employees and job applicants to implement reasonable accommodation unless there is undue hardship.
As promised when the Act passed, the EEOC published the regulations, which include guidance on how to comply with the PWFA in your workplace. The final regulation goes into effect on June 18, 2024.
Next Steps
If you have 15 or more employees…
Make sure you have a strong workplace accommodations policy, which accounts for the ADA and pregnancy accommodation, among other accommodation requirements your organization is subject to.
Train supervisors on the policy and how to make sure employees are accommodated in the workplace.
Communicate the accommodation process to employees and be available for questions and support needs.
For leaders and HR folks, I recommend watching this PWFA online training webinar.
EEOC Releases New Workplace Guidance on Harassment
For the first time in what feels like decades, the EEOC has provided a comprehensive update in the guidance around workplace harassment. The updates build on the EEOC’s previous work, address legal developments and emerging issues, and include virtual work environments.
Next Steps
Review the following new resources from the EEOC: Summary of Key Provisions; Small Business Fact Sheet; and Employee FAQ.
Make sure your anti-harassment and discrimination policy aligns with your organization's values, and with both federal and state regulations. Note- many states have specific language they want employers to include in their harassment policies.
Train your supervisors and staff on your policy and reporting process.
