Recent weeks have been a busy time for HR compliance experts. We've seen some meaningful regulatory changes that could impact every business, plus some proposed changes coming down the line.
In this guide, you'll find a summary of the main things to be aware of, including:
- Pregnant Workers Fairness Act Final Rule Published by the EEOC
- Restoring and Extending Overtime Protections Final Rule Published by the DOL
- FTC Votes to Ban Non-Competes
1. Pregnant Workers Fairness Act Final Rule Published by the EEOC
The EEOC has published the final rule and interpretive guidance for the Pregnant Workers Fairness Act (PWFA). This requires covered entities to provide reasonable accommodations to employees or applicants for limitations related to pregnancy, childbirth, or other related medical conditions. "Covered entities", under the PWFA rules, includes:
- Public and private employers with 15+ employees
- Unions
- Employment agencies
- Federal Government
The interpretive guidance outlines how employees should request a reasonable accommodation, which is similar to the reasonable accommodation and interactive process under the Americans with Disabilities Act (ADA). First, the employee or applicant would notify the employer of a need for accommodation; then, the employer should engage in the interactive process with the employee or applicant to identify an appropriate accommodation.
The EEOC has stated they expect many accommodations under the PWFA should be able to be granted after simple exchanges of information between the employer and employee or applicant, such as brief conversations or emails, and it should not need to be a long process.
Employers should ensure supervisors are trained about the PWFA, so they know how to handle accommodation requests when they come in. They should also be aware requests from employees and applicants do not need to specifically state they are looking for an accommodation in order to be considered.
Also, they should be aware that limitations may change throughout a pregnancy or during recovery from childbirth, and as such, accommodations should be reviewed regularly and adjusted as needed. The Job Accommodation Network, or JAN (www.askjan.org) is a great resource employers can use to research or get answers to questions about accommodations.
Another important note about the PWFA is that, in many instances, supporting documentation (e.g., a doctor’s note or medical certification) is not needed. Employers are not required to obtain medical information from the employee’s healthcare provider, except in limited circumstances.
More information:
- What You Should Know About the Pregnant Workers Fairness Act | U.S. Equal Employment Opportunity Commission (eeoc.gov)
- Federal Register: Public Inspection: Implementation of the Pregnant Workers Fairness Act.
2. Restoring and Extending Overtime Protections Final Rule Published by the DOL
The DOL has published their Final Rule regarding Restoring and Extending Overtime Protections.
- Effective 7/1/2024, the standard salary level for exemptions will rise from $684 per week ($35,568 per year) to $844 per week ($43,888 per year).
- On 1/1/2025, there will be another increase to $1,128 per week ($58,656 per year). Every 3 years thereafter, the salary levels will be adjusted (starting 7/1/2027 and moving forward).
- As part of this update, the Highly Compensated Employee (HCE) total annual compensation threshold also increased.
It's important for employers to start reviewing their current exempt population now to determine which employees will be impacted.
Employers will also want to assess the potential financial impact on the business, whether their approach to ensure compliance will be raising salaries to maintain the exempt status of those employees below the updated threshold or moving employees below the threshold to non-exempt status and beginning to pay overtime based on federal and/or state regulations.
Employers will also want to develop a comprehensive action plan outlining steps they need to take prior to 7/1/2024, and what other considerations are needed for the next increase on 1/1/2025. Additionally, they will want to develop a communication plan either for the entire organization or for the employees who will be directly affected by this update, and ensure managers are included in the communications if their employees will be affected.
More information:
3. FTC Votes to Ban Non-Competes
The FTC voted on 4/23/2024 to ban employers from enforcing non-compete clauses against employees. This is scheduled to take effect 120 days after publication in the Federal Register. This will ban new non-competes for all workers once the final rule is effective. In addition, existing non-completes with employees who are not 'senior executives' are no longer enforceable. For this rule, 'senior executive' refers to workers earning over $151,164/year and who are in a policy-making position.
Employers should stay tuned for more information on the final rule. For now, they may want to begin reviewing any non-competes and other relevant agreements for non-compete language to ensure it is removed moving forward once this rule is in effect.
There is also a requirement to notify employees that the non-compete agreement or clause is no longer valid; sample language can be found on page 566 of the proposed rule here: Non-Compete Clause Final Rule (ftc.gov)
More information:
Need help with compliance?
As always, we may see challenges to these rules, but it always helps to be aware and begin preparing now.
Need some help with HR compliance. Book a free call with a Helios HR expert and let's talk about how your business can deal with regulatory challenges.
