How do revisions to the Fair Labor Standards Act (FLSA) and changes in overtime regulations, along with the proposed noncompete rule by the Federal Trade Commission (FTC), impact your business?
Lakeside HR Group Compliance Update, April 2024 – As part of our commitment to keeping you informed, we would like to bring to your attention two significant upcoming legal changes that may impact your business operations:
Recent updates to the Fair Labor Standards Act (FLSA) and Overtime Ruling, and the proposed Noncompete Rule by the Federal Trade Commission (FTC).
Staying informed and proactive is key to navigating these upcoming changes smoothly. As always, our team is here to assist you in any way possible to ensure compliance and mitigate any potential risks to your business.
FLSA & Overtime Ruling
What is changing?
Effective July 1, 2024, the salary threshold for exemption status under the FLSA will increase from $35,568 to $43,888. This adjustment will have a substantial impact on professional services, healthcare, and financial activities. On January 1, 2025, the threshold will increase to $58,656. This ruling will also include a three-year automatic adjustment mechanism for updating automatically.
Additionally, the “highly compensated employee” exemption will see an increase from $107,432 to $132,964 on July 1, 2024, and to $151,164 on January 1, 2025, with subsequent updates every three years.
Where should you start?
We recommend a proactive approach. Take the time to evaluate current exempt roles within your organization. Consider reassessing roles that may have previously been within the gray area of exemption status. For those falling under the new threshold, now may be an opportune moment to review their classification as exempt employees.
FTC Proposed Non-compete Rule
What is changing?
The final rule prohibits the implementation of new noncompete agreements with all workers, including senior executives, effective from the rule’s enactment. Existing noncompete agreements will be treated differently based on the status of the employee. For senior executives, existing agreements can remain valid, for other workers, existing noncompete agreements will become unenforceable. A “senior executive” is defined as a worker earning more than $151,164 annually in a “policy-making position.”
Employers must provide notice to current and former workers bound by existing non-compete that they will not enforce any non-compete against them. This will exclude executives.
Where should you start?
This ruling is set to take effect on August 22, 2024. We strongly advise reviewing all current agreements with your legal representatives. Specifically, examine existing non-compete agreements and hiring documents to ensure compliance with the new regulations. Additionally, take this opportunity to review non-disclosure and non-solicitation agreements to safeguard your trade secrets and confidential business information effectively.
With the salary thresholds for exemption status and the restrictions on non-compete agreements set to change, it’s crucial for businesses to assess their current practices and make any necessary adjustments to ensure compliance and mitigate risks. Our team is dedicated to assisting you through these transitions, providing guidance and support every step of the way. By staying ahead of these changes, you can position your business for success while safeguarding the rights and well-being of your employees.
About Lakeside HR Group
We are a premier full-service HR Consulting and Recruiting firm connecting people and businesses through personalized services. Our boutique firm of experienced HR professionals specializes in tailored HR services for small to midsize businesses. Our clients partner with us to find the best talent and support solutions to help their businesses thrive.
