As we close out 2024, many are curious about what potential changes could be coming down the pipeline to impact Human Resources (HR) under a new administration. Throughout 2024, we’ve seen more emphasis on expanding paid family leave laws within various states, further efforts to emphasize payroll transparency, as well as the continued expansion of accommodations under the Pregnant Worker’s Fairness Act, to name just a few. Perhaps the most noteworthy issue, however, is the Federal ruling which overturned the previously proposed 2025 Fair Labor Standards Act (FLSA) overtime exemption thresholds.  

In our Compliance Corner, we’ll provide a bit more insight into how to handle the year’s top updates. We’ll also highlight trends and insights as we head into the new year—and best practices on how to keep your organization compliant.  

Fair Labor Standards Act Salary Exemption Threshold 

This topic has been quite a rollercoaster for employers.  Basically, a new exempt salary threshold came and went in 2024. To give some background, the FLSA generally requires employers to pay an employee overtime if the employee works more than 40 hours in a week. The law “exempts” some employees from that requirement. These exemptions fall into the categories of executive, administrative, professional, computer and outside sales. There are also exemptions for highly compensated employees. To qualify for the white-collar exemption, an employee must satisfy a three-prong test.  

In April, the Department of Labor (DOL) issued final regulations raising the white-collar exemption salary threshold to $844 per week ($43,888 annually). This increase became effective on July 1, 2024. The rule was scheduled to raise the salary threshold to $1,128 per week ($58,656 annually) in January 2025. The rule also increased the “highly compensated employee” (HCE) threshold from the current $107,432 annual salary to $132,964 as of July 1, 2024, and again to $151,164 as of January 1, 2025. Many employers were scrambling to either raise salaries for the July 1^st deadline or reclassify employees as non-exempt (eligible for overtime and other employment laws).   

Then, on November 15^th, the US District Court for the Eastern District of Texas vacated and set aside the DOL’s final regulation increasing the salary threshold for the white-collar overtime exemption under the FLSA nationwide. The court held that each of the three components of the rule exceeded the DOL’s statutory authority under the FLSA, and the rule was struck down nationwide. This final decision now vacates the rule for all employees, meaning that the January 1, 2025 increase will not go into effect as scheduled, and the July 1, 2024 increase is nullified. 

What This Means for You: There are many decisions that your organization needs to make. Dealing with the nullified January 1^st increase may be fairly easy, as there is a short period of time available to make adjustments before January 1^st if you were planning to change salaries in accordance with the new law. The tougher aspect of this is the nullified July 1^st increases, which have already taken place. It is legally permissible to reduce an employee’s pay rate or convert them back to exempt status, with an advance notice of the change but there are several factors to consider when dealing with this tenuous situation. There are several states that have salary thresholds for exemption status that are already higher than the July 1 exemption status salary increase. This includes Alaska, California, Colorado, New York, Washington and Maine. If you have employees in any of these states, then this new ruling will not have an effect.   

What You Can Do: It’s legal to reduce an employee’s pay rate or change them back to exempt status but this can be very difficult to carry out in practice and is generally not a best practice as it can be very detrimental to employee morale.  An organization could delay or reduce future pay increases instead of rolling back the July 1^st increases.  Also, as new employees are hired, employers can return to their previous salary and exemption status practices.   

New State Leaves 

In the past several years, many states, counties and cities have passed paid sick leave laws, family and medical leave laws and other time off that involves mandated pay. 2024 was no exception. California expanded the amount of time covered by sick leave to five days, Minnesota’s statewide Earned Sick and Safe Time leave went into effect and Illinois enacted the Paid Leave for All Workers Act.  In addition, several other states expanded the use of sick leave  

There were also several new state family and medical leaves introduced, many of which are paid. Georgia started a new parental leave for state employees, Colorado workers were able to start using Colorado Paid Family and Medical Leave, and Vermont’s Paid Family Leave program expanded to employees of private employers.   

In typical New York fashion, the state now requires employers to provide paid break time of thirty minutes for lactation purposes.     

What This Means for You: There is quite a bit to manage in the world of paid time off (PTO), especially if you have employees in multiple states. There may be negative consequences for the mishandling of these protected leave benefits that are mandated by states. You must be very careful to comply with all leave laws and be constantly aware of updates and when they go into effect–and be aware of the necessary paperwork and payroll requirements that may accompany them.   

What You Can Do: Looking ahead to 2025, Alaska, Missouri and Nebraska will introduce brand new sick leave laws, and contributions to family and medical leave programs will begin for Maine and Maryland in anticipation of their Family Leave Laws. It's recommended that you keep up with new employment legislation in all states where you have employees working. Ensure that your policies in your handbook reflect any new legislation and that your management team is aware of the new legislation and how it may affect each of their employees.   

 Pregnant Workers Fairness Act 

Although the Pregnant Workers Fairness Act (PWFA) took effect on June 27, 2023, we saw continued guidance throughout 2024. Employers must strive to think outside the box in terms of accommodations and how it relates to the pregnant workforce.  This law is meant to bridge the gap between the Americans with Disabilities Act (ADA) and the Pregnancy Discrimination Act (PDA), protecting pregnant and postpartum women at work. Prior to the PWFA, employees impacted by pregnancy, childbirth or related medical conditions had a right to receive accommodations in certain situations, but these rights were inconsistently interpreted by courts, employers and attorneys. The intent of the PWFA is to eliminate inconsistencies by providing clear expectations for employers and stop the trend of putting someone on a standard leave of absence, rather than utilizing the appropriate accommodation. 

What This Means for You: Employers need to approach these instances with an open mind. As this disability may not encompass a finite amount of time, it could extend beyond just pregnancy and involve fertility issues, postpartum depression and nursing difficulties.  Under the ADA, employees must be able to perform essential functions of the job, whereas the PWFA does not require the individual to perform essential job functions. It is very important that as an employer, nuances of these aspects are well understood.   

There is a requirement that your pregnant employees be provided with reasonable accommodations to allow them to work up until giving birth, even if they cannot perform every essential function of their job. Some reasonable accommodations can include access to drinking water, later arrivals due to morning sickness, closer parking, flex hours and/or remote work, and extra bathroom or lactation breaks.  Employers need to get in the habit of having these discussions to amicably meet accommodations that allow for an employee to remain working, rather than just suggesting leave for a specified time period. 

What You Can Do: Make sure to effectively communicate and outline your employee handbook policies to ensure employees are mindful of PWFA rights. Train your management team to be well-versed and armed with insights and information so that they are taking necessary steps to engage the pregnant workforce and find ways to successfully accommodate and keep compliant with this federal law.  At the moment, the majority of states have their own specific pregnancy accommodation laws, so be sure to review the details of those laws for all states where you have employees, and account for those laws in your employee handbook.  

OSHA-Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings 

In August of 2024, the Occupational Safety and Health Administration (OSHA) proposed a new standard, Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings. This new standard is a significant approach to setting a federal heat standard in order to protect workers. This new standard would apply to all employers conducting outdoor and indoor work in general industry, construction, maritime and agriculture arenas under OSHA. The standard would require employers to create a plan to evaluate and control heat hazards in their workplace and clarify obligations necessary to protect employees from hazardous heat.  

The main goal is to reduce the number of occupational injuries, illnesses and fatalities caused by exposure to hazardous heat. In response, many states have already started implementing laws/ordinances to create heat safety plans. For example, an Arizona city ordinance required Phoenix contractors and subcontractors to develop and implement a written heat safety plan to prevent heat-related illnesses and injuries in the workplace. This plan outlined access to free sanitized cool water, hydration breaks, readily available shade or air conditioning, air conditioning in vehicles and overall training on heat illness prevention. California also implemented an Indoor Heat Illness Standard in July for its employers to follow. In November, Nevada adopted heat illness regulations by placing new requirements on employers, requiring businesses with more than ten employees to implement protective measures for indoor and outdoor heat.   

Additionally, several other states, including Washington, Minnesota, Oregon and Colorado have already moved forward in implementing regulations to mitigate either indoor or outdoor heat hazards. 

What This Means for You: This standard is one to watch, as proposed legislation is still pending, and the comment period has been extended to January 15, 2025. The end result could be a new federal heat standard for employers to abide by, thus requiring a plan to evaluate and control heat hazards in the work environment. There may be requirements to provide training and compile plans on the prevention of injury, illness and even fatality caused by hazardous heat exposure. You may need to provide ample cool down areas, water stations and personal protective equipment (PPE), as well as a log to track incidents. Look for more training to be implemented across the board for employees and managers, as well as requirements to monitor temperatures, hydration levels, outdoor air quality and direct sunlight exposure.  

What You Can Do: Be mindful of hazardous heat and the impact it may have on employees, even considering high temperatures and outdoor wildfire smoke in affected areas near your workplace. Look for more clarification in mid-January. Regardless of what happens on the federal level, look for more states to target heat safety concerns and how it affects the workforce. 

Pay Transparency/Wage Posting Laws 

Pay Transparency (or salary transparency/wage transparency) is the practice of openly sharing information about compensation with employees and job candidates. It is also referred to as “Wage Posting” in some state laws. Often, this involves disclosing the salary range on job postings, and to current employees, upon request. Several states have continued to enact pay transparency laws in 2024, including Hawaii, Maryland and Washington, D.C. Some states already have pay transparency laws, including California, Colorado, Connecticut, Nevada, New York, Rhode Island and Washington. In 2025, Illinois, Massachusetts, Minnesota, New Jersey and Vermont will enact new pay transparency laws.   

What This Means for You: It looks like the trend toward pay transparency is here to stay and is likely to accelerate. If it does not affect your organization at this time, it most likely will in the future. If you have employees in any state where there are pay transparency laws, you will have to follow pay transparency practice.   

There are many great things about pay transparency.  It tends to lead to greater pay equity, as organizations become more accountable for implementing fair pay practices. It can also help attract more talent and reduce uninterested candidates, since knowing the salary range up front will help attract only candidates who would be satisfied with the posted salary range. Organizations that post their pay range on job postings get many more applicants than ones that do not. Good pay transparency practices can help to increase employee trust, retention and engagement.  

There are some complexities related to pay transparency. As an employer, you may have to redesign your pay practices so that you have consistent and equitable pay ranges throughout your organization.  

What You Can Do: If there are current pay transparency laws in states where you do business or have employees, or if you are in a state that is enacting pay transparency legislation next year, then you must prepare in several areas. The first thing to do would be to assess your current pay practices and standardize salary ranges throughout your organization. Ensure that your internal salary ranges are consistent and reflect the market value for specific positions. You will want to provide training on these policies to your managers and HR department. You will  also want to develop clear communication strategies for pay transparency and be prepared to answer questions about salary ranges when candidates or employees ask.  Even though salaries are important, and will be highlighted with pay transparency in effect, you will want to make sure that you are communicating the full picture of your total rewards program and highlighting the many perks and benefits that you offer.   

Workplace Violence Prevention 

Workplace violence is any act or threat of physical violence, harassment, intimidation or other threatening disruptive behavior that occurs at the work site. OSHA’s General Duty Clause requires all employers to provide a safe workplace for employees, which includes taking steps to minimize the threat of workplace violence. In July 2024, the State of California passed a law requiring all employers to establish, implement and maintain an effective Workplace Violence Prevention Plan (WVPP). Cal/OSHA put out a template for employers to follow when developing their own internal plan/policy, which includes workplace violence hazard identification and evaluation, training for employees, violent incident logs, as well as an outline of how to investigate incidents.   

Many California employers are still scrambling to implement plans going forward in 2025. In similar fashion, Texas passed a law requiring healthcare employers to implement workplace violence prevention plans effective September 1, 2024, thus setting the standard for the industry, while OSHA works to finalize a federal mandate, which is anticipated for 2025, in the healthcare arena. 

What This Means for You: Workplace violence legislation is on the rise.  More states will likely trend toward implementing robust policies and procedures to be mindful of violence within the workplace and establish standards for training, conducting investigations/reporting mechanisms and building anti-retaliation clauses to ensure safety for all employees.     

What You Can Do: Be proactive in your approach to workplace safety.  Maintain open dialogue between employees and managers to include mental health and the well-being of your staff. Some companies choose to implement an Employee Assistance Plan as an added benefit to ensure struggling employees can have access to free mental health counseling. Take precautionary measures to strategize with your management team so they can begin to recognize signs of troubled employees that may pose a potential risk or threat within the work environment.   Open communication and continued emphasis on safety within the workplace will be key. 

Looking Forward to 2025 

As we roll into the new year, we know one thing for sure—change is inevitable. While no one can predict the future of pending legislation or outcomes, you can commit to remaining well versed in a variety of HR compliance matters that may impact your workforce and industry. Remaining abreast of expanding leave laws, increased accommodation awareness, OSHA related safety measures and pay transparency requirements will ensure that you are keeping potential risks at bay. Knowledge is power! 

Consider partnering with isolved’s HR Services to augment your internal HR Department and remain on the cutting edge of strategies and solutions necessary for compliance, retention and the overall health of your organization. 

About Allison Hitzeman:

Allison Flanders Hitzeman (Ally), MBA, SHRM-CP, OTR/L, Certification in Compensation Studies, is an Human Resources Business Partner.  She has many years of experience in the human resources field both as a consultant and a small business owner. She has been working in the Human Resources Services Department at isolved (as a consultant and a business partner) since 2017. Ally currently resides in Phoenix, AZ with her husband, 2 children, and 2 cats. 

About Stacie Jaquith:

Stacie Z. Jaquith has many years of experience in the human resources field in a variety of industries, to include: government contracting, legal and financial services.  She joined isolved in June 2024 as a Human Resources Business Partner working within the Defined Services Team.  Stacie is a proud Navy spouse, presently living in Lemoore, CA with her husband and three children.

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