Important Legal Updates for Employers

By JD Howlette Law

New Overtime Pay Rule:

Yesterday, the U.S. Department of Labor announced a new rule that will require employers to pay overtime (i.e., time-and-a-half) to any salaried workers making under $43,888 annually (or $844 weekly) beginning July 1, 2024. The salary threshold will increase to $58,656 annually (or $1,128 weekly) beginning January 1, 2025.

Note, the new rule applies to those employees who were traditionally exempt from the overtime rules under the Fair Labor Standards Act (i.e., administrative, professional, or highly compensated employees).

Key takeaway: If you're an employer, you will be required to pay overtime to any employee who works more than 40 hours per week that makes less than $43,888 in 2024 or less than $58,656 in 2025, regardless of whether the individual is an administrative or professional employee.

Ban on Noncompete Agreements:

Yesterday, the Federal Trade Commission issued a final rule to promote competition by banning noncompete agreements/provisions nationwide. Many employers include a noncompete provision in their employment agreements that prohibit an employee from working with a direct competitor for a certain period of time post-employment. Under the new rule, existing noncompete agreements will no longer be enforceable after August 21, 2024 (i.e., the effective date of the new rule). All employers are required to provide written notice to workers who are bound by an existing noncompete agreement that the agreement is no longer enforceable. Note, the rule does not apply to senior executives (i.e., those making more than $154,161 annually).

Key Takeaway: If you're an employer, thoroughly review your employment agreements to determine whether you must send the written unenforceability notice required by the new rule.