Key Regulatory Rules Issued by the Dept. of Labor (DoL) and the Federal Trade Commission (FTC)

April 25, 2024

This week saw two significant rules issued by the DoL and FTC, both with broad impact on many IAM member company operations.

The Dept. of Labor released a final rule governing overtime pay for a range of salaried employees. Beginning July 1st, federal overtime pay requirements will go into effect for all hours worked (over 40 per week) unless that employee is paid the equivalent of an annual salary of $43,888 ($844 a week). Beginning January 1st, 2025, the annual pay requirement will be raised to $58,656 ($1,128 a week). The current exempt annual salary threshold is $35,568.

IAM has followed and reported on this rule for several years, as incoming and outgoing Administrations had previously updated eligibility and connected pay requirements.

Also this week, the Federal Trade Commission (FTC) issued a final rule governing employee non-compete clauses.

With very limited exceptions for senior company executives signed to company non-compete clauses before the rule’s effective data (October 20, 2024), the rule prohibits company enforcement of current non-compete clauses, and future non-compete clauses being placed into employment agreements.

Additionally, employers are also required to notify workers with non-compete clauses in their work agreements and contracts by the rule’s effective date that they will no longer be enforced.

While both of these significant rules are very likely to be challenged in court (in fact, the FTC rule was challenged by two separate lawsuits yesterday afternoon), they remain in place sans court injunction, court ruling/decision, or rescission by the respective agency.

IAM will continue to follow both rules, and update members on any changes. For more information, please contact Bryan Vickers (703-403-2882, with IAM's Government and Regulatory Affairs Team.