By: Claire Sweetman
DOL’s New Overtime Rule
On January 1, 2025, the U.S. Department of Labor’s (DOL) new Overtime Rule[1] takes effect. The implementation of the rule will make millions of workers eligible for overtime pay by increasing the salary threshold for the executive, administrative and professional (EAP) exemptions under the Fair Labor Standards Act (FLSA).[2] The salary threshold for EAP overtime exemptions was increased from $43,888 to $58,656 per year. Meanwhile, the threshold for the highly compensated employee (HCE) exemption will increase to $151,164 from $132,964.[3] The DOL explained in a blog post published in tandem with the Overtime Rule that the jump in the salary thresholds was based on the DOL’s lack of periodic increases between 1975 and current day. To prepare for the Overtime Rule, HR professionals should identify all employees who are being treated as exempt under the current threshold and new threshold. For employees who earn less than $58,656 annually, or $151,164 for HCE, HR functions will need to decide how to best implement the new rule.[4]
National Labor Relations Board (NLRB) General Counsel Memorandum Urges Board to Find Certain Non-Compete Agreements Unlawful
On October 7, 2024, NLRB General Counsel Jennifer Abruzzo issued a memorandum encouraging the NLRB to find certain non-compete provisions unlawful.[5] The memorandum asked that the NLRB also remedy any related infringement on employee rights as fully as possible, and argued that certain “stay-or-pay” provisions may infringe on employees’ rights to engage in protected concerted activity under Section 7 of the National Labor Relations Act (NLRA).[6] GC Abruzzo also argued that overly broad non-compete agreements that are enforced against “mere employment” target conduct protected by Section 7 because securing a new job is one method of improving terms and conditions of employment.[7] Regarding stay-or-pay provisions – including quit fees, breach fees, damages clauses, sign-on bonuses, and other types of cash payments tied to mandatory stay periods – GC Abruzzo argued that these types of provisions may violate the NLRA. The memorandum stated that both stay-or-pay provisions and non-compete agreements both restrict employees’ mobility by increasing fear of termination for engaging in protected activity and therefore make it more difficult for employees to resign.[8]
GC Abruzzo’s memorandum is not the official stance of the NLRB, nor is it binding law. However, the memorandum provides guidance on policy and forecasts GC Abruzzo’s enforcement priorities.
[1] https://blog.dol.gov/2024/04/23/what-the-new-overtime-rule-means-for-workers
[2] https://parsonsbehle.com/insights/employment-law-update-october-24-2024?utm_source=mondaq&utm_medium=syndication&utm_content=articleoriginal&utm_campaign=article
[3] Id.
[4] Id.
[5] https://www.jdsupra.com/legalnews/legal-update-general-counsel-memorandum-4193976/#:~:text=On%20October%207%2C%202024%2C%20the,%5By%5D%20as%20possible.%E2%80%9D
[6] Id.
[7] Id.
[8] Id.