Something Decided (For Today), Something Still Undecided, and Something New
By Michael Santo, COSHRM Legislative Director and Managing Attorney at Bechtel & Santo
[Michael Santo is presenting at the COSHRM State Conference Signature Series on September 18, 2024. Won't you join us?]
As we leave the dog days of summer behind, and Halloween decorations start to appear on the shelves, we take a look in this article at a long-awaited decision, look ahead to another one that’s been on the shelf for a few months, and we review a bill from 2023 that finally became effective.
The Something Decided
As you’ll recall, in April 2024, the Federal Trade Commission announced its final Non-Compete Clause Rule. The Final Rule identified that it is an unfair method of competition for persons to, among other things, enter into non-compete clauses with workers on or after the final rule’s effective date.
The Rule also identified that this prohibition extended beyond just those agreements labeled as a “non-compete agreement.” In essence, the Rule covered any condition of employment that prohibits a worker from, penalizes a worker for, or functions to prevent a worker from either seeking or accepting work in the United States with a different company or operating a business in the United States. The new rule also covers non-solicitation, non-disclosure restrictions, and training repayment agreements, as well as forfeiture for competition agreements. In short, if the FTC Rule went into effect, it would have significantly restricted an organization’s ability to enter into noncompete agreements with employees.
The effective date for this Rule was September 4, 2024. But a Texas Court and a Florida Court put an end to that this week by determining that the FTC had overstepped its authority in creating the Rule. The decisions are very likely to be appealed by the FTC. But for now, the Rule does not become effective in September.
The Something Still Undecided
On July 1, 2024, the Department of Labor raised the salary basis threshold from $684 per week ($35,568 per year) to $844 per week ($43,888 annually). There will be another hike on January 1st, when the threshold goes to $1,128 per week ($58,656 annually). Or maybe not. That is, like the FTC’s efforts, the DOL’s efforts are facing a number of legal challenges, and those Courts may decide to revert the salary-basis test to the previous amount in the mid-30,000s. Rulings on these cases are expected some time in December 2024.
These decisions are particularly relevant due to Colorado’s apparent return to more traditional inflation rates. That is, as you’ll recall, Colorado’s current minimum salary threshold for private employers is $55,000.00. This amount is due to increase on January 1, 2025, by the same Consumer Price Index as the Colorado minimum wage. In 2024, the minimum wage went up by a little more than 5%. So, if the minimum wage goes up by that amount again, Colorado’s salary threshold will come in at a little more than $58,000, which would be under the FLSA’s proposed threshold. But if the increase follows what Colorado raised its minimum wage at the start of 2023, that salary threshold would go up to nearly $60,000. Then again, if the Courts strike down the FLSA’s increase, private companies in Colorado will follow the state’s threshold no matter what the Consumer Price Index comes in at. Of course, those employers not covered by Colorado’s COMPS (e.g., counties, cities, municipal corporations, etc.) will either follow the FLSA’s new threshold ($58,656 annually) in 2025 or go back to following the old threshold ($35,568 per year) depending on what the Courts decide.
Perhaps the best summary to this brewing issue as we await the numerous Court decisions are the immortal words of Chevy Chase when he portrayed then-President Gerald Ford on Saturday Night Live way back in 1975. Those words were, “I’m sorry. I was told that there would be no math.” Ah, Chevy, if that were only an option.
The Something New
On July 1, 2024, Colorado’s Job Application Fairness Act officially went live. This law prohibits employers from inquiring about a prospective employee’s age, date of birth, and dates of attendance at or date of graduation from an educational institution on an employment application. While most employers probably stopped asking age and date of birth on the application a long, long, long time ago, organizations may need to update their applications to ensure that the application does not include any requirement for an applicant to identify when the applicant graduated from any educational establishment. An employer may request an individual to verify compliance with age requirements imposed pursuant to or required by:
(1) a bona fide occupational qualification pertaining to public or occupational safety;
(2) a federal law or regulation; or
(3) a state or local law or regulation based on a bona fide occupational qualification.
Further, organizations may request information regarding graduation dates in subsequent inquiries, just not in the initial application.
Questions? Email info@coshrm.org
