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The Federal DOL Increases Exempt Employee Minimum Salaries

On April 26, 2024, the U.S. Department of Labor (DOL) published the much-anticipated final rule that will increase the minimum salary for many exempt employees. The increase will take effect in two steps. If you’d like to review the regulations, the relevant changes start on page 130 of the downloadable PDF.

Executive, Administrative, and Professional Employees

Under the new rule, exempt executive, administrative, and professional employees (often referred to collectively as “EAP” employees) must be paid at least:

  • $844 per week ($43,888 per year) beginning on July 1, 2024
  • $1,128 per week ($58,656 per year) beginning on January 1, 2025

Exceptions

Teachers and practicing doctors and lawyers are exempt from these minimum salary requirements under federal law but may be subject to different state minimums. School-specific minimums apply to academic administrative employees.

Computer Employees

Exempt computer employees can be paid on a salary or hourly basis. If salaried, they’re considered part of the EAP group and need to make the minimums listed above. Alternatively, they can be paid at least $27.63 per hour—this hourly rate was not changed by the rule.

Highly Compensated Employees (HCE)

Employees who are exempt under the HCE exemption must be paid at least the minimums listed above on a salary basis and receive total annual compensation of at least:

  • $132,964 per year beginning July 1, 2024
  • $151,164 per year beginning January 1, 2025

State Law

As usual, if a state law requires higher minimum salaries than what is required by the federal rule, the state minimums must be followed.

Future Increases

The rule implements automatic updates to the minimum salary levels every three years starting July 1, 2027. Resourcing Edge doesn’t know what the future minimums will be, but we will provide notice, and employers will have at least 150 days before those changes take effect.

Potential Challenges

The last time the DOL attempted a significant change to the salary minimums, the rule was challenged and ultimately blocked just weeks before taking effect. While we have no way of predicting if that will happen again, it’s very likely that this final rule will be litigated.

What To Do Now

Employers have the following options:

  • Ensure that salaried exempt employees make at least the new minimum salary required for their classification.
  • Reclassify currently exempt employees as nonexempt and provide them with the rights and benefits that nonexempt employees are entitled to (e.g., minimum wage and overtime pay).

Resourcing Edge will continue to monitor the situation and share developments as they occur.

Non-Competes Banned

On April 23, 2024, the Federal Trade Commission (FTC) announced a final rule that bans almost all noncompete clauses nationwide. The final rule is scheduled to be published in the Federal Register on May 7 and will take effect 120 days after publication, on September 4, 2024.

The rule will ban all new noncompete clauses as of the rule’s effective date and will also make existing noncompete clauses void, except for those with senior executives that are in effect before September 5, 2024. Employers will be required to provide written notice to affected workers if they are subject to noncompete clauses that are no longer enforceable.

The final Noncompete Rule, including additional information about the final rule, employee model notices, and FAQs, can be found on the FTC’s Noncompete Rule page.

Pregnant Workers Fairness Act – Final Regulations Published

The final rule for the Pregnant Workers Fairness Act (PWFA), which applies to employers with 15 or more employees, has been published and takes effect June 18, 2024.

With over 100 pages of preamble, regulations, and interpretive guidance, there’s obviously a lot to take in. Thankfully, you don’t need to spend a whole afternoon reading unless or until you’re considering denying an accommodation—that’s when you should take a close look at what the Equal Employment Opportunity Commission (EEOC) has to say to ensure you’re compliant.

Here are some key takeaways to be aware of even if you expect to accommodate most requests.

Some Accommodations Are Presumptively Reasonable

The following accommodations for pregnant employees are presumed to be reasonable, meaning an employer will need an exceptionally good rationale for denying them based on undue hardship:

  1. Allowing an employee to carry or keep water near and drink, as needed
  2. Allowing an employee to take additional restroom breaks, as needed
  3. Allowing an employee whose work requires standing to sit and whose work requires sitting to stand, as needed
  4. Allowing an employee to take breaks to eat and drink, as needed

So for instance, if a pregnant employee tells you they need more bathroom breaks or to sit on occasion, you should allow it. You’ll want to document the conversation so you have a record of saying yes, but there shouldn’t be a protracted back and forth with the employee about whether their request can be granted. If you believe any of these accommodations do create an undue hardship, we recommend speaking with an attorney before denying them.

Requests for Documentation Are Limited

Employers can only ask for documentation to support a request for accommodation when it’s reasonable under the circumstances. Blanket policies that automatically require documentation aren’t permitted.

In the following situations, seeking supporting documentation is considered unreasonable and isn’t allowed:

  1. When the limitation and accommodation needed are obvious
  2. When the employer already has sufficient information to determine that the employee has a limitation and needs an accommodation because of it
  3. When a pregnant employee requests one of the presumptively reasonable accommodations listed in the section above
  4. When the employee requests an accommodation related to pumping at work (or nursing, if feasible)
  5. When the requested accommodation is available to employees with a non-PWFA limitation without providing documentation

When collecting documentation is permitted, employers can only request the minimum amount that confirms the employee’s condition, verifies that it’s related to pregnancy, childbirth, or a related condition, and describes the adjustment that the employee needs.

The Definitions Are Broad (and Might Surprise You)

Known limitations that must be accommodated can be modest, minor, or episodic and don’t need to rise to the level of a disability—they also include medical care, meaning you need to allow time off for appointments. Pregnancy and childbirth include (among other things) infertility, fertility treatment, and the use of contraception. And related medical conditions (among many other things) include termination of pregnancy, including by miscarriage, stillbirth, or abortion.

Employers Can’t Require “Magic Words” or Special Forms

An employee’s request for accommodation can be made orally, in writing, or by any other effective means. Employers can’t require that it be in a specific format or use specific language for them to acknowledge the request. Employers also can’t require that supporting documentation be on a specific form.

Accommodations Should Be Provided Without Delay

Once an employee makes a request for accommodation, the employer should do their best to provide it (or an interim accommodation) as soon as possible, even if supporting documentation will ultimately be required. The EEOC made it clear that they will frown upon delays, particularly with respect to simple or presumptively reasonable accommodations.

If You Thirst for More Knowledge

You can read and word-search the final rule here. The first 87 pages are the EEOC’s background and explanation of why and how they responded to public comments. The regulations start on page 88 of the PDF, and the Interpretive Guidance, which includes 78 very helpful examples of how the law would be applied in real life, starts on page 94.

Action Items

  • Make sure your policy addressing the PWFA accurately reflects the regulations.
  • You should also educate your managers (and anyone else likely to receive a request) on the presumptively reasonable accommodations, the limitations on asking for supporting documentation, and the importance of prompt accommodation.
  • If you are unsure of your managers’ abilities to respond appropriately, you may want to require that anyone who receives a request immediately communicate it to Human Resources.

HIPAA Privacy Rule Update

The Department of Health and Human Services (HHS) published an update to the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule on April 26, 2024. The final rule, originally drafted in 2023 after the U.S. Supreme Court decision in Dobbs v. Jackson Women’s Health Organization, addresses the use and disclosure of protected health information (PHI) for reproductive health data and is effective on June 25, 2024. Covered entities, including self-funded group health plans, should review their policies, procedures, and business associate agreements to determine where modifications are needed to ensure compliance.

The final rule prohibits the use or disclosure of PHI by a covered entity (a healthcare provider, health plan, or healthcare clearinghouse), or the business associate of a covered entity, from the following:

  • Conducting a criminal, civil, or administrative investigation into or imposing liability on any person for merely seeking, obtaining, providing, or facilitating reproductive healthcare where it is lawful.
  • Identifying any person for the purpose of conducting such investigation or imposing liability.

The prohibition applies where a regulated entity (e.g., a covered entity or their business associate) has reasonably determined one or more of the following conditions exist, as stated in an HHS fact sheet:

  • The reproductive health care is lawful under the law of the state in which such health care is provided under the circumstances in which it is provided. For example, if a resident of one state traveled to another state to receive reproductive health care, such as an abortion, that is lawful in the state where such health care was provided.
  • The reproductive health care is protected, required, or authorized by Federal law, including the U.S. Constitution, regardless of the state in which such health care is provided. For example, if use of the reproductive health care, such as contraception, is protected by the Constitution.

When a regulated entity receives a request for PHI potentially related to reproductive healthcare, a new signed attestation must be obtained. Regulated entities must comply with the new rule by December 23, 2024, and revise their notice of privacy practices by February 16, 2026.

Resourcing Edge will provide updates when HHS publishes the sample language for the attestation and notices.

2023 EEO-1 Component 1 Data Collection Deadline to File is June 4, 2024

On February 26, 2024, the Equal Employment Opportunity Commission (EEOC) announced that the 2023 EEO-1 Component 1 data collection opened on April 30, 2024, and the deadline to file is June 4, 2024. The EEOC’s EEO-1 Component 1 online Filer Support Message Center was also available on April 30, 2024.

All updates about the 2023 data collection, including the instruction booklet and file upload specifications, will be posted on the EEO-1 website when they’re available.

HR Services Team
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