Buckle up, dear readers! More employment law and HR changes impacting employers are either effective this summer or are on the horizon.
The U.S. Department of Labor (DOL) increased the Fair Labor Standards Act (FLSA) annual salary level threshold for executive, administrative, and professional exemptions (typically referred to as the white-collar exemptions).
Under the FLSA, employees should generally be classified as non-exempt (and therefore eligible for overtime) unless they meet certain criteria such as the duties test and salary threshold. Effective July 1, 2024, the salary threshold increased to $43,888 ($844 per week). For comparison, the prior threshold was $35,568 ($684 per week). Highly Compensated Employee (HCE) threshold increased to $132,964 per year, which includes at least $844 per week.
Effective January 1, 2025, the annual salary threshold will rise to $58,656 ($1,128 per week). The HCE threshold will increase to $151,164 per year, which includes at least $1,128 per week.
The January increase is widely expected to be challenged prior to implementation. In the meantime, however, employers must take stock of current exempt employees that do not meet the upcoming new threshold of $58,656 and make a plan while staying tuned to developments.
The Equal Employment Opportunity Commission (EEOC) published updated protocols in “Enforcement Guidance on Harassment in the Workplace.” The EEOC outlines workplace scenarios that may be interpreted as harassing conduct based on a protected class. The EEOC also provides guidance on the features of an effective policy, complaint process, and training.
An effective policy should generally include items such as:
An effective complaint process should generally include the following:
Effective workplace training features should:
Minnesota’s Earned Sick and Safe Time (ESST) law was updated in several ways. Key changes include clarification of an employee’s base rate and allowing an employee to use ESST to make funeral arrangements, attend a funeral service or memorial or address financial or legal matters that arise after the death of a family member.
Employers are no longer required to provide ESST on the earnings statement but may “choose a reasonable system” to provide employees with the total number of ESST hours available for use, as well as the total number of ESST hours used each pay period. Use of ESST can be tracked in 15-minute increments, whereas the original language required the smallest increment generally tracked by the employer’s payroll process.
In addition, the amendments stipulate that if an employer fails to provide employees with ESST as the statute requires or fails to allow employees to use ESST, the employer may be liable for an amount equal to all ESST that should have been provided or could have been used, plus an equal amount of liquidated damages.
Effective July 1st, employers face increased penalties for misclassification of employees as independent contractors. The Minnesota Department of Labor may enforce penalties of up to $10,000 for each individual violation. In addition, officers or agents of the employer can face personal liability.
Effective August 1st, during any leave for pregnancy accommodation (under Minn. Stat. §181.939, subd. 2), the employer must maintain coverage under any group insurance policy or health care plan for the employee and any dependents as if the employee was not on leave, provided, however, that the employee must continue to pay any employee share of the cost of the benefits.
Effective August 1st, the MHRA updates provide an expanded definition of “disability” to include “an impairment that is episodic or in remission and would materially limit a major life activity when active.” The definition of “familial status” has been clarified and expanded and violations of the MHRA may include a civil penalty and compensatory damages.
Minnesota Paid Leave: Wage Reporting Info For October 2024
Starting January 1, 2026, Minnesota will implement a new Paid Leave program, providing job protection and partial wage replacement for workers needing time off to care for themselves or a family member.
The first wage detail reports will be due on October 31, 2024, and will be based on wages paid between July 1, 2024, and September 30, 2024. Premiums will be due in 2026.
Most employers in Minnesota with one or more employees will be covered by the new program. Small businesses with 30 or fewer employees will be eligible for reduced premiums.
If Your Organization is Covered By the Unemployment Insurance Program.
Your UI employer account will be automatically converted into a joint UI/Paid Leave account to submit a wage detail report.
If Your Organization is NOT Covered By the Unemployment Insurance Program. The employer will need to register for a Paid Leave Only account through the UI Online system… the State will post instructions on their website as soon as Paid Leave Only accounts are available.
Private Insurance Option. Employers will be able to apply for a private plan exemption if they offer a private plan with at least the same rights, protections, and benefits provided to employees under the Paid Leave law. To be considered for an exemption, the employer will need to submit documentation showing proof of coverage and that the plan fully meets the requirements laid out under the Paid leave law. Stay tuned as these options develop.
In April of this year, the Federal Trade Commission (FTC) voted to prohibit most new noncompete agreements in employment contracts. It also makes all existing noncompete agreements (except those covering senior executives) unenforceable.
The rule is supposed to be effective September 4th, but is facing legal opposition. The U.S. District Court for the Northern District of Texas granted a preliminary injunction and postponed enforcement for the plaintiffs but did NOT extend the injunction nationwide. However, the U.S. District Court for the Eastern District of Pennsylvania denied the plaintiff’s motion for a preliminary injunction.
Employers must continue to monitor the situation and have a plan in place. If the rule survives legal challenges, employers will be prohibited from entering into most new concompete agreements and prohibited from enforcing existing noncompetes (except in limited circumstances). Minnesota employers, remember that Minnesota already made changes limiting noncompete clauses.
Minnesota. Effective Jan. 1, 2025, any “person or entity that employs 30 or more employees” in Minnesota must disclose in job postings “the starting salary range” and a general description of the benefits and other compensation that will be offered to the applicant hired for the position.
This is a brief synopsis of complicated and hotly contested regulations. Stay tuned for updates and consult with a trusted advisor to fully understand how the final rule impacts your organization.
Originally published in the August edition of Business North.
Human Resources thought leader, Stacy Johnston, provides innovative solutions with a mission to support organizations in understanding and engaging their biggest competitive advantage… their employees. Johnston is a licensed attorney and holds the SHRM-CP credentials.
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