5 New and Proposed Federal Employment Laws and Rules That Employers Need To Know
This article was written for Birmingham Business Journal and was published June 15, 2023.
This year has already seen substantial activity in federal employment law, but there are more significant changes in this area expected in 2023.The following is a summary of the significant new and proposed laws/rules that employers should be aware of and be taking the necessary plans for compliance.
The Providing Urgent Maternal Protections for Nursing Mothers Act (PUMP Act)
The PUMP Act became effective on April 28, 2023. It expands existing protections under the Fair Labor Standards Act (FLSA) so that now, with some limited exceptions, all employees who are nursing a child are entitled to reasonable time and a private location (other than a restroom) to express breast milk for up to one year after the child’s birth.
Employers with less than 50 employees have a possible undue hardship exemption. A nursing break under the act is unpaid unless the employee is not completely relieved of their duties during the break. Teleworking employees also must be free from any camera observation during a covered break. Employees are protected from retaliation for exercising their rights under the act and may enforce a violation of the act through a private cause of action.
The Pregnant Workers Fairness Act (PWFA)
The PWFA codifies protections for employees already in effect under the Americans with Disabilities Act. Under the PWFA, employers with 15 or more employees are required to provide reasonable accommodations for an employee’s known limitations arising from pregnancy, childbirth, or related medical conditions unless it would be an undue hardship to do so. Employers are prohibited from forcing employees to take paid or unpaid leave in lieu of a reasonable accommodation. Employees are protected from discrimination or retaliation for requesting an accommodation. The PWFA becomes effective on June 27, 2023.
Expected DOL increase to overtime rule
The U.S. Department of Labor (DOL) projects it will issue its proposed overtime rule this summer. The FLSA provides that covered employees be paid overtime pay at the rate of one and one-half times their regular rate of pay for all hours worked beyond 40 in a workweek unless an exemption applies. An exemption is available for executive, administrative, and professional employees.
To qualify for these exemptions, employees must be paid on a “salary basis” of at least $684 per week ($35,568 annually), as well as meet certain duties tests. The current salary threshold was last increased on Jan. 1, 2020. With any salary increase in the DOL’s proposed rule, employers must decide to raise the impacted employee’s salary to the new, higher minimum amount to retain the exemption or convert the employee from exempt to non-exempt (hourly) status and pay him/her overtime.
DOL and NLRB rules to determine if a worker should be classified as an employee or independent contractor
The DOL has proposed a rule, expected to be issued in 2023, that will change the analysis for determining employee or independent contractor classification under the FLSA.
Under its proposed rule, the DOL intends to implement a non-exhaustive six-factor “economic realities” test for determining if the worker is economically dependent on the employer, which would support a classification of employee.
The expectation is that this new test may result in more workers being classified as employees, thus entitling them to more employer-provided benefits and other legal protections, such as minimum wage and overtime.
Additionally, similar to the DOL’s proposed rule, on June 13, 2023, the National Labor Relations Board (NLRB), which enforces the National Labor Relations Act that covers most employees, overruled a previous ruling on this issue that set forth an independent contractor test with “entrepreneurial opportunity” as the core factor. The NLRB announced a new multi-factor test, with many factors overlapping those proposed by the DOL. The expectation is that this new test will result in more individuals being covered by the NLRB and permit them, unlike independent contractors, to organize and bargain over working conditions.
The Federal Trade Commission (FTC) proposed ban on non-compete agreements
In January of 2023, the FTC proposed a rule to ban non-compete agreements. This new rule would also require employers to rescind any existing non-competes and inform employees, including former employees, that they are no longer in effect and will not be enforced.
The FTC requested comment from the public on several alternatives to an outright ban on non-compete agreements, such as, for example, a ban on such agreements only for workers making less than a certain amount of annual compensation, which at least suggests that the final rule may not include a total ban.
As indicated, these new or proposed laws/rules are generally employee-friendly and could have substantial impact, including increased costs, on covered employers.
