PEO + HR Regulation Round Up for May

Editor’s Note: Every month, our team of experts provides you with changes to existing regulations and policies, new laws & regulations, and additional state/federal information that could impact your business. It’s quick-and-easy to skim but provides timely news you need.

Compensation Threshold Increases for Overtime Eligibility

The Department of Labor issued a final rule impacting the salary threshold required to qualify for the executive, professional, and administrative exemptions from overtime pay requirements.

This rule does NOT impact eligibility for the computer or outside sales exemptions. The rule also does NOT alter the job duties components to the exemption tests.

The rule is set to increase the salary threshold to $43,888 effective July 1, 2024, and it will increase again to $58,656 on January 1, 2025. However, this rule will almost certainly be challenged in court, which may impact the rule’s applicability.

You can find more information on this final rule here and here. 

More on Federal Non-Compete Bans

On April 23, the Federal Trade Commission (FTC) approved a new rule banning non-compete agreements for nearly all workers.

Specifically, employers are not allowed to enter into new non-compete agreements, they cannot enforce existing non-compete agreements, and they must notify employees subject to non-compete agreements that they will not enforce them.

Some exceptions are allowed, such as non-competes for senior executives, which may remain in force. Like the salary threshold rule, this non-compete rule will almost certainly be challenged in court, which may impact its anticipated effective date of 120 days after the rule is published in the Federal Register (earliest effective date would be August 22, 2024).

You can read more about this rule here and here.

New York Enacts ‘Freelance Isn’t Free’ Act

Following New York City, New York State enacted a law, effective May 20, 2024, that gives freelance workers (independent contractors) more rights. Read more here

EEO-1 Reporting Due June 4

Employers with 100 or more employees must file the annual EEO-1 Component 1 report.

The filing period for EEO-1 reporting is April 30 – June 4. If you are a business with 50 or more employees and hold a government contract, please speak with an HR expert as you may be required to report.

District of Columbia’s Wage Transparency Law

Any private employer with at least one employee in the District of Columbia is subject to compliance with this Wage Transparency Law beginning June 30, 2024.    

Separation Notice Requirements

Depending on the state in which you operate, you may be required to provide your employees with a separation notice that provides the employee with:   

  • Notice of their right to file for unemployment benefits
  • Basic separation information for the state unemployment agency
  • Some states require using specific separation notice forms  

This notice properly informs the employee and state agency about the job separation.