On April 23, 2024, the US Department of Labor finally announced its changes to the Fair Labor Standards Act (FLSA) regulations regarding bona fide exempt executive, administrative, professional, outside sales, and computer employees including those that are highly compensated. Moreover, the US DOL was also busy publishing new guidance regarding artificial intelligence and automated systems in the workplace.
Also, the DOL was not the only government agency in April 2024 to issues new changes and guidance. The Equal Employment Opportunity Commission (EEOC) issued guidance regarding enforcement of workplace harassment. And, on April 23, 2024, the Federal Trade Commission (FTC) issued new rules banning most workplace noncompete agreements.
Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees
Human resources professionals and employment lawyers should not be surprised that the DOL was planning on changing the rules for for executive, administrative, professional, outside sales, and computer employees since Biden became president. The most central part of the change is the increase in minimum salaries necessary for an employee to qualify as exempt from the FLSA’s minimum wage and overtime requirements. Back in 2016, the Obama DOL attempted to increase minimum salary requirements for exempt employees; however, the attempt was blocked by a nationwide temporary injunction that ultimately went nowhere once Trump became president.
According to the DOL’s new rule, minimum salaries will increase as follows:
| DATE | STANDARD SALARY LEVEL | HIGHLY COMPENSATED EMPLOYEE TOTAL ANNUAL COMPENSATION THRESHOLD |
|---|---|---|
| Before July 1, 2024 | $684 per week (equivalent to $35,568 per year) | $107,432 per year, including at least $684 per week paid on a salary or fee basis. |
| July 1, 2024 | $844 per week (equivalent to $43,888 per year) | $132,964 per year, including at least $844 per week paid on a salary or fee basis. |
| January 1, 2025 | $1,128 per week (equivalent to $58,656 per year) | $151,164 per year, including at least $1,128 per week paid on a salary or fee basis. |
| July 1, 2027, and every 3 years thereafter | To be determined by applying to available data the methodology used to set the salary level in effect at the time of the update. | To be determined by applying to available data the methodology used to set the salary level in effect at the time of the update. |
There is concern that, as in 2016, lawsuits will be filed to block or postpone the increases. Thus, while employers begin to make adjustments based on the upcoming salary changes, they may want to keep their eyes open for the possibility that the changes will not take effect on July 1, 2024.
For more information about current and pending overtime changes, watch the webinar:
Artificial Intelligence and Automated Systems in the Workplace
As society continues to adjust to and implement artificial intelligence in our lives, HR professionals are facing new challenges in how they interact with prospective and current employees. Part of this includes learning how AI impacts that laws employment laws, including the FLSA.
To help provide some guidance, on April 29, 2024, the DOL, Wage and Hour Division issued Field Assistance Bulletin No. 2024-1 entitled, “Artificial Intelligence and Automated Systems in the Workplace under the Fair Labor Standards Act and Other Federal Labor Standards.”
As an introduction, the DOL stated:
AI and other automated systems can provide ways to streamline tasks for employers, improve
workplace efficiency and safety, and enhance workforce accountability. However, without
responsible human oversight, the use of such technologies may pose potential compliance
challenges with respect to federal labor standards. As new technological innovations emerge, the
federal laws administered and enforced by WHD continue to apply, and employees are entitled to
the protections these laws provide, regardless of the tools and systems used in their workplaces.
In the Field Assistance Bulletin No. 2024-1, the WHD addressed the following topics regarding:
AI and the FLSA
- Hours worked, including
- Tracking work time
- Monitoring break time
- Waiting time
- Work performed at multiple geographic locations
- Calculating Wages Owed
- Nursing employee protections under the Providing Urgent Maternal Protections for Nursing Mothers Act (PUMP Act)
- Retaliation
AI and the Family and Medical Leave Act (FMLA)
- Processing leave requests
- Certifications to support FMLA leave
- FMLA interference and retaliation
AI and the Employee Polygraph Protection Act (EPPA)
For more information about how to implement legally protected AI technology, watch the webinars:
EEOC Enforcement Guidance on Harassment in the Workplace
The EEOC is responsible for enforcing federal equal employment opportunity (EEO) laws including Title VII of the Civil Rights Act of 1964. From time to time, the EEOC updates the guidance it relies on when determining if workplace discrimination has occurred. As described by the EEOC:
This guidance serves as a resource for employers, employees, and practitioners; for EEOC staff and the staff of other agencies that investigate, adjudicate, or litigate harassment claims or conduct outreach on the topic of workplace harassment; and for courts deciding harassment issues.
Notable, the guidance focuses on three considerations when determining its enforcement decisions:
- Covered Bases and Causation: Was the harassing conduct based on the individual’s legally protected characteristic under the federal EEO statutes?
- Discrimination with Respect to a Term, Condition, or Privilege of Employment: Did the harassing conduct constitute or result in discrimination with respect to a term, condition, or privilege of employment?
- Liability: Is there a basis for holding the employer liable for the conduct?
For more information the new EEOC harassment guidance, watch the webinars
FTC Non-Compete Clause Rule
Perhaps the most controversial rule issued by a federal agency in April 2024, was the FTC’s rule regarding non-competes in the workplace. In its new rules, almost all non-compete agreements are banned in the United States. It states it reason for the new rule is to, “to promote competition by banning noncompetes nationwide, protecting the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation.”
Within 24 hours of the new rule, the US Chamber of Commerce and the Business Roundtable filed a lawsuit challenging the new rule, and many other lawsuits are expected.
It is worth noting that the new rule does not prohibit non-disclosure agreements (NDAs) or non-solicitation agreements so long as they do not meet the definition of non-compete in its effect. It stated:
the Commission finds that less restrictive alternatives, including appropriately tailored NDAs and non-solicitation agreements, are sufficient to address disclosure of confidential information and concerns related to client business.
According to the FTC’s rule, non-solicitation agreements are agreements that “prohibit a worker from soliciting former clients or customers of the employer.”
