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NORTHSHORE SOCIETY FOR HUMAN RESOURCE MANAGEMENT
What’s Happening in HR – Alert
By Jose Barro, Legislative Director 1/30/2025
President Trump issues executive order titled, “Ending Discrimination and Restoring Merit-Based Opportunity”
President Trump’s January 21, 2025, executive order titled “Ending Discrimination and Restoring Merit-Based Opportunity” (“Executive Order”) directs the termination of federal government practices and policies that protect and promote diversity and inclusion; the Executive Order also addresses diversity and inclusion initiatives in the private sector.
For private sector employers, particularly those with federal contracts, the executive order has two immediate impacts:
1. Revokes Executive Order 11246. The Order revokes Executive Order 11246 of September 24, 1965—the longstanding order that prohibits discrimination in federal contracting and requires federal contractors to develop affirmative action plans and ensure equal opportunity. Nevertheless, contractors “may continue to comply” with Executive Order 11246 and its existing regulatory framework for 90 days from January 20, 2025.
2. Federal Contractor Compliance with Civil Rights Laws.a. The Order directs that the federal contracting process “shall be streamlined to enhance speed and efficiency, reduce costs, and require Federal contractors and subcontractors to comply with our civil-rights laws." This includes directing the Office of Federal Contract Compliance Programs to “immediately cease . . . [h]olding Federal contractors and subcontractors responsible for taking ‘ affirmative action’” and “[a]llowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.”
b. The Order further directs that all federal contracts and grants shall include a “term requiring the contractual counterparty or grant recipient to agree that its compliance in all respects with all applicable Federal anti-discrimination laws is material,” for purposes of the False Claims Act, to the government’s payment decisions, as well as a “term requiring such counterparty or recipient to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”
Looking forward, the executive order directs the Attorney General to submit a report, within 120 days of the Order, with “recommendations for enforcing Federal civil-rights laws and taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI.”
The order also directs each agency “to identify up to nine potential civil compliance investigations of publicly traded corporations, large nonprofit corporations or associations, foundations with assets of $500,000,000 or more, state and local bar and medical associations, and institutions of higher education with endowments over $1,000,000,000.”
SHRM has issued guidance for employers regarding how to adjust DEI initiatives in light of the executive order: https://www.shrm.org/topics-tools/employment-law-compliance/how-to-adjust-dei-initiatives-under-trumps-new-guidelines
NORTHSHORE SOCIETY FOR HUMAN RESOURCE MANAGEMENT
What’s Happening in HR – Alert
By Michael F. Weiner, Legislative Director 07/01/24
Texas District Court issues limited injunction on DOL’s final rule raising salary threshold for exempt employees under FLSA that only applies to the State of Texas as an employer
On June 28, 2024, a Texas District Court enjoined the implementation of the DOL’s April 2024 final rule, but limited the injunction to only the State of Texas in its capacity as an employer. The June 28 ruling does not stop the Rule from taking effect for all other employers. The Court limited its ruling because the Court found that it did not have sufficient information regarding other employers to make the injunction nationwide.
There is another case still pending before the same court that does seek a nationwide injunction, but the Court has not yet ruled on that case, although one would expect the same reasoning to apply. That said, until the Court enjoins the Rule in the other case (or any other court rules in a different case), the Rule is in effect as of July 1, 2024, for all other employees.
While waiting for a court to rule on a nationwide injunction, a short-term solution for employers would be to make sure employees who were exempt under the previous salary test do not work any overtime until the District Court rules on the remaining injunction request. Of course, if the employee nonetheless does work overtime in a workweek before a court’s ruling granting a nationwide injunction, that employee must be paid overtime.
Recall, on April 23, 2024, the Department of Labor released its final rule raising salary requirements for exempt employees under the FLSA. The rule becomes effective July 1, 2024, and increases the salary requirements in two stages: on the effective date and on January 1, 2025.
Prior to July 1, 2024, the salary threshold was $35,568 ($684 per week). Under the final rule, the minimum salary for exempt employees is now $43,888 (844 per week). In January 2025, the salary requirement will be raised to $58,656 ($1,128 per week). The salary threshold will then be updated automatically every three years.
The final rule also raises the minimum salary required for the highly compensated employee exemption to $132,964 on July 1, 2024, and to $151,164 on January 1, 2025. The current level is $107,432.
NORTHSHORE SOCIETY FOR HUMAN RESOURCE MANAGEMENT What’s Happening in HR – Alert By Michael F. Weiner, Legislative Director 04/25/24 DOL issues final rule raising salary threshold for exempt employees under FLSA On April 23, 2024, the Department of Labor released its final rule raising salary requirements for exempt employees under the FLSA. The rule becomes effective July 1, 2024, and increases the salary requirements in two stages: on the effective date and on January 1, 2025. Currently, the salary threshold is $35,568 ($684 per week). Under the final rule, the minimum salary for exempt employees will be $43,888 (844 per week) effective July 1, 2024. In January 2025, the salary requirement will be raised to $58,656 ($1,128 per week). The salary threshold will then be updated automatically every three years. The final rule also raises the minimum salary required for the highly compensated employee exemption to $132,964 on July 1, 2024, and to $151,164 on January 1, 2025. The current level is $107,432. Additional information can be found at https://www.dol.gov/agencies/whd/overtime/rulemaking. It is expected that various business groups will challenge this final rule in court.
NORTHSHORE SOCIETY FOR HUMAN RESOURCE MANAGEMENT What’s Happening in HR – Alert By Michael F. Weiner, Legislative Director 04/24/24 Federal Trade Commission issued final rule generally banning noncompetes On April 23, 2024, the Federal Trade Commission issued its final rule banning noncompetes nationwide. The rule becomes effective 120 days after it has been published in the Federal Register. The U.S. Chamber of Commerce has already stated that it will challenge the rule in court. The final rule prohibits employers from entering into new noncompetes with workers (both employees and independent contractors) and prohibits employers from enforcing existing noncompetes, except for those with senior executives as of the effective date. A “senior executive” is a worker earning more than $151,164 per year and who is in a policy-making position. Employers cannot enter into new noncompetes with senior executives after the effective date of the final rule. Existing causes of action for violations of noncompetes are allowed to continue. The rule requires employers to notify workers whose noncompetes are invalid that those noncompetes are no longer in effect and will not be enforced. The New rule provides model language for the notice. The final rule can be found at: https://www.ftc.gov/legal-library/browse/rules/noncompete-rule.
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DOL's Rule on Contract Employees - 01/09/2024
DOL’s Rule Narrows Scope of Independent Contractor Classification (shrm.org)
NORTHSHORE SOCIETY FOR HUMAN RESOURCE MANAGEMENT
What’s Happening in HR – Alert
By Michael F. Weiner, Legislative Director 09/26/23
DOL issues Proposed Rule on Salary Level for Exempt Employees under FLSA
On August 30, 2023 DOL released new proposed rule requiring higher salaries for employees to be considered exempt.
Current salary threshold is at least $35,568 annually, or $684 per week. The proposed rule would raise the salary level to $55,068 annually, or $1,059 per week. Highly compensated employee threshold would be raised from $107,432 to $143,988.
There would be automatic updates to these salary thresholds every three years.
The Proposed Rule can be located at the Federal Register website at the following:
https://www.federalregister.gov/documents/2023/09/08/2023-19032/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and
The DOL is accepting comments through November 7, 2023.
As HR is well aware, it is very important to properly classify a worker as exempt or nonexempt and the salary level is a very important part of that test. Please make you thoughts known by submitting a comment on the proposed rule.
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