It's a big week for new final rules from the federal government. First off, the USDOL released new overtime regulations raising the salary thresholds.
If this sounds familiar, it's because the Obama administration proposed something similar in 2020 before the rule was challenged in court and ultimately withdrawn under the Trump administration.
The rule is effective July 1, 2024 (barring any legal challenges that may very well develop).
But that's not all. The Federal Trade Commission is also releasing a final rule largely banning the use of non-compete agreements. The rule was announced at a meeting this afternoon.
Again, this rule is also likely subject to multiple legal challenges.
But for employers, the combination of these two new rules can be significant.
I'll be reviewing them more in the upcoming days.
For now, the takeaways are:
1) If you currently have exempt employees making less than about $44,000, you may need to review (and potentially eliminate) the exemption. On January 1, 2025, that level goes up to $58,500.
2) If you have non-compete agreements, most of those will be banned under the rule likely around the end of the summer. Some existing senior-level non-competes may remain in place for now but all other non-competes should be reviewed immediately.
3) Non-solicitation provisions and confidentiality provisions become all that more important.
This is a rapidly developing area; be thoughtful in your next steps and make sure you understand the implications. We're still some time before implementation but barring an injunction, these could have the biggest impact on employers we've seen in the last decade.
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1moIn Portugal, an “uncertain term” employment contract (contrato de trabalho a termo incerto) is a type of fixed-term contract where the exact end date is not specified at the outset. Instead, the contract lasts until a certain task or project is completed, or until a certain event occurs. If you are hiring to test a new market or for a specific project, the uncertain term contract provides favorable statutory notice periods and flexibility for both parties. Additionally, both parties can mutually agree to terminate the contract at any time without adhering to the statutory notice periods.