Publications
Three Major Initiatives: New York’s Paid Prenatal Leave, DOL’s Overtime Pay Expansion and FTC’s Ban of Non-Compete Agreements
- New York State Mandates Paid Prenatal Leave
After the passage of its 2025 budget this past Monday, New York will become the first state to require employers to provide paid leave for pregnant employees to attend doctor’s appointments.
The new law, which will amend Labor Law § 196-b, will allow pregnant employees to use up to 20 hours of PTO during a 52-week period for healthcare services during or related to the pregnancy, such as attending “physical examinations, medical procedures, monitoring and testing, and discussions with a health care provider related to the pregnancy.” The 20 hours for prenatal care are in addition to the existing sick leave requirements, can be taken in hourly increments, and must be paid at the higher of the employee’s regular rate of pay and the applicable minimum wage. Employers will not be required to pay out unused leave under this amendment.
The new requirement will take effect on January 1, 2025. Employers should ensure that their leave policies and practices are updated and compliant with the new legislation prior to the law taking effect.
2. DOL Expands Overtime Pay Eligibility
On Tuesday, the U.S. Department of Labor unveiled a final rule that will expand overtime eligibility to millions of workers across the country. The rule raises the salary threshold for exempt status under the FLSA to $43,888 as of July 1, 2024 and to $58,656 as of January 1, 2025. Currently, the threshold is set at $35,568 per year. Any worker earning less than the new thresholds as of their respective dates will be eligible for overtime pay, that is, one and a half times their regular rate of pay, for all hours worked over 40 per week. The salary thresholds will be updated every three years, starting on July 1, 2027.
The rule also increases the overtime salary threshold for the highly compensated employee exemption from the current $107,432 to $132,964 on July 1, 2024 and $151,164 on January 1, 2025.
Employers should assess the current classification and salaries of all employees and make any adjustments necessary to ensure compliance with the new rule.
3. FTC Bans Non-Compete Agreements
On Tuesday, April 23rd, the Federal Trade Commission voted 3-2 to issue a final rule banning noncompete agreements across the country. Interpreting Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices in or affecting commerce, the FTC determined that noncompete agreements are an unfair method of competition and hence illegal under the Act.
Once in effect, the rule will bar any employer from entering into a noncompete agreement with any employee. Noncompete agreements entered into before the rule takes effect will not be enforceable except for those entered into with a senior executive. For purposes of this rule, senior executive is defined to mean employees earning more than $151,164 per year who are in a policy-making position. The rule requires employers to notify non-senior executives who signed now unenforceable non-competition covenants that they will not be subject to an enforcement action and provides model language for this purpose.
The rule will be effective 120 days after the date of publication in the Federal Register. However, groups opposed to the rule have already commenced litigation to block its implementation.
If you have questions relating to this update or general questions, please contact a Wiggin and Dana Labor and Employment attorney.
