Arkansas HVACR NewsMagazine May 2024

HVACR NewsMagazine May 2024

State National Chapter News

New Overtime Rules

FTC Bans Noncompete Agreements

On April 23, 2024, the US Department of Labor announced the final rule that expands the overtime compensation requirements of the Fair Labor Standards Act (FLSA). Under current law, all employees covered by the FLSA are entitled to overtime pay at the rate of 1.5 times their regular wage for all hours worked over 40 hours in a work week. Under the “white - collar” exemption, employees who perform certain administrative, executive, computer, and/or professional duties are exempt if they are paid at least $35,568 per year ($684/week) on a salary basis. However, effective July 1, 2024, the salary threshold will increase to the equivalent of an annual salary of $43,888 ($844/week) and increase to $58,656 ($1128/week) on January. 1, 2025. The July 1 increase updates the present annual salary threshold of $35,568 based on the methodology used by the prior administration in the 2019 overtime rule update. Impacted employers should review their employee roster to determine who may be impacted by this change and develop a plan to minimize risk and ensure compliance. Obviously, we can expect numerous lawsuits in the coming days attempting to block enforcement of this new rule. Article authored by H. Wayne Young of Friday Eldredge & Clark, LLP a full-service law firm representing businesses, nonprofits, healthcare organizations, government entities and individual clients with offices in Little Rock 501-376-2011 and Rogers 479-695-2011.

Under the FTC’s new rule, existing non competes for the vast majority of workers will no longer be enforceable after the rule’s effective date. Existing non competes for senior executives - who represent less than 0.75% of workers - can remain in force under the FTC’s final rule, but employers are banned from entering into or attempting to enforce any new non-competes, even if they involve senior executives. Employers will be required to provide notice to workers other than senior executives who are bound by an existing noncompete that they will not be enforcing any non competes against them. In January 2023, the FTC issued a proposed rule which was subject to a 90-day public comment period. The FTC received more than 26,000 comments on the proposed rule, with over 25,000 comments in support of the FTC’s proposed ban on non-competes. The comments informed the FTC’s final rulemaking process, with the FTC carefully reviewing each comment and making changes to the proposed rule in response to the public’s feedback. In the final rule, the Commission has determined that it is an unfair method of competition, and therefore a violation of Section 5 of the FTC Act, for employers to enter into non-competes with workers and to enforce certain non-competes. The Commission found that non competes tend to negatively affect