The Department of Labor Drastically Increased the Minimum Salary Threshold for Overtime Exempt Employees

The federal Fair Labor Standards Act (FLSA) requires all employees to be paid an hourly wage. Employees that work more than 40 hours in a workweek are required to be paid overtime at the rate of one and a half times their hourly wage. Certain employees are exempt from being paid overtime when they are paid a minimum weekly salary. Beginning July 1, 2024, the minimum weekly salary for exempt employees will increase from $684 ($35,568 per year) to $844 ($43,888 per year). Six months later, on January 1, 2025, the minimum weekly salary will increase to $1,128 ($58,656 per year).   

Not every employee qualifies to be paid on a weekly salary basis. As a general rule, only employees that fall within the definition of a bona fide executive, administrative, or professional are permitted to be paid on a salary basis. Employees performing manual, non-management labor are not permitted to be paid on a weekly salary basis. Employers that fail to properly classify workers as hourly or exempt, and pay them accordingly, may be liable for back owed wages, overtime pay, and penalty wages.  

The increased minimum salary threshold is expected to impact four million workers exempt under the current regulation. If you are an employee misclassified as an exempt employee and know you are owed overtime pay, contact our office to learn more about your rights.

The EEOC’s Focus on the Construction Industry

The U.S. Equal Employment Opportunity Commission (“EEOC”) will focus on the construction industry to prevent and remedy employment discrimination. The EEOC attributes the focus on the construction industry to what it identified as a pattern of egregious harassment and discrimination incidents against women and persons of color on construction job sites. The incidents referred to include discrimination in recruitment and apprenticeships, hostile work environments based on race, national origin, or sex, and unequal treatment in training, hours, pay, promotions, and layoffs.

The EEOC published a report highlighting incidents where employers failed to respond to employee claims of harassment and discrimination by inaction or retaliation. Those incidents resulted in large monetary damages to employers and mandatory revisions of the employer’s policies and procedures. The EEOC states they intend to continue to enforce anti-discrimination laws on behalf of employees and begin to collaborate with employers, workers, unions, industry groups, and civil rights organizations to develop industry-specific prevention and training to ensure fair hiring practices, equal treatment on the job, and safe and inclusive workplaces.

The EEOC is abiding by their statements and actively filing lawsuits against construction companies across the country for discrimination incidents on behalf of employees. This governmental intervention calls for the construction industry to acknowledge and address employment discrimination issues that may arise to create respectful and inclusive workplaces.

Companies should review their policies and procedures surrounding equal employment opportunities, discrimination, and harassment. Construction employees should understand and follow their employer’s policies and report violations within the company or outside agencies as needed.

By: Samuel Hernandez, Attorney; Irma Alvarez, Summer Law Clerk (2023)

The NLRB Limits Use of Confidentiality Provisions in Severance Agreements

Severance agreements are due for a change as the National Labor Relations Board (NLRB) recently ruled that severance agreements containing broad confidentiality and non-disparagement provisions are largely unlawful and unenforceable as violating Section 7 of the National Labor Relations Act (NLRA).

Previously, employers could offer severance benefits to laid-off employees in exchange for agreements limiting prospective claims. Severance agreements customarily included confidentiality and non-disparagement clauses prohibiting employees from discussing the terms of the agreement itself and making statements detrimental to the interests of the employer.

The NLRB’s recent decision in McLaren Macomb, 372 NLRB No. 58 (2023), reestablished that employers cannot offer severance benefits contingent on employees signing severance agreements containing broad terms that interfere, restrain, or coerce employees from exercising their rights under Section 7 of the NLRA, which includes the right to participate in concerted activities for the purpose of collective bargaining or other mutual aid or protection. Notably, Section 7 protections apply only to non-supervisory employees.

In the McLaren Macomb decision, the NLRB explained that simply offering confidentiality and non-disparagement terms in severance agreements violate the NLRA, as such terms themselves have a reasonable tendency of prohibiting current or former employees from exercising their Section 7 rights. The decision rejects provisions that prevent employees from disclosing information contained in the severance agreement to obtain legal advice or assistance from a union representative, speaking to the media, assisting former coworkers, disclosing information to assist in NLRB investigations, or making any comments that could be negative to the employer.

The NLRB explained, however, that non-disparagement and confidentiality provisions may coexist with Section 7 rights if they are narrowly tailored and not so overly broad that they would directly or incidentally interfere with employee-protected rights. Employers and employees should review their severance agreements to ensure compliance with the NLRB’s latest decision.

By: Samuel Hernandez, Attorney; Irma Alvarez, Summer Law Clerk (2023)