2024 Labor and Employment Year in Review

As 2024 draws to a close, employers must navigate a labor and employment landscape marked by both sweeping proposals and significant reversals. Efforts to ban non-compete agreements and raise overtime exemption thresholds under the Fair Labor Standards Act (FLSA) were struck down in the courts. At the same time, updates to worker classification rules, expanded protections for pregnant workers, and other restrictions on non-compete agreements introduced new obligations. Meanwhile, state laws advanced paid leave entitlements and strengthened worker rights. Looking forward, these trends are expected to continue as states adopt new laws that affect all aspects of employment.

The Year 2024 In Review

Federal Developments

• Non-Compete Agreements: In April 2024 the Federal Trade Commission (FTC) issued a rule banning nearly all non-compete agreements, aiming to enhance labor mobility and wage growth. In August 2024, however, a federal judge blocked the rule, citing the FTC's lack of statutory authority. The appeal remains pending. For more information, read our relevant client alert here.
• Overtime Exemptions: In April 2024, the DOL proposed raising salary thresholds for the FLSA executive, administrative and professional exemptions from overtime, increasing the white-collar exemption threshold to approximately $44,000 in July 2024 and $59,000 in January 2025. On November 15, 2024, however, a Texas federal judge struck down the rule, reverting the thresholds to 2019 levels ($35,568 for the white-collar exemptions, and $107,432 for the highly compensated employee test). Employers can now roll back or cancel planned salary adjustments. More details are in our client alert here.
• Pregnant Workers Fairness Act (PWFA): Effective June 18, 2024, the PWFA requires employers to provide reasonable accommodations for pregnancy related conditions unless doing so would pose an undue hardship. Temporary modifications may be granted for conditions like lactation or pre-clampsia. Despite initial legal challenges, the statute remains fully effective, though there are limited exceptions in Mississippi and Louisiana. For more, see our client alert here.
• Captive Audience Meetings: In November 2024, the National Labor Relations Board (NLRB) ruled in Amazon.com Services LLC, 373 NLRB No. 136, that mandatory meetings held by employers during work hours to share their views on unionization with employees , otherwise known as “captive audience” meetings, violate the National Labor Relations Act unless attendance is voluntary and without repercussions. This decision reshapes employer-employee interactions during unionization campaigns.
• The Department of Labor (DOL) published a final rule on January 10, 2024, revising how workers are classified as employees or independent contractors under the Fair Labor Standards Act (FLSA). Effective March 11, 2024, the rule rescinded the 2021 Independent Contractor Rule and introduced a six-factor “economic realities” test. Employers should evaluate worker classifications under this updated framework. For more details, see our client alert here.

State Updates

• Paid Leave Laws:  Numerous states enacted or enhanced their paid leave requirements, including:
• Illinois, California, and Minnesota: New paid leave laws took effect on January 1, 2024, expanding employee entitlements to sick leave, family leave, and safe leave. Learn more in our client alert here.
• Colorado and Connecticut: Amendments to existing paid leave laws took effect in August and October of 2024. For more information, see the relevant client alert here.
• Michigan: On February 21, 2025, Michigan’s Earned Sick Time Act will take replace the Paid Medical Leave Act. The state’s minimum wage and tipped wage rates will also increase. For additional detail, see our client alert here.
• Paid Prenatal Leave: Starting January 1, 2025, New Yok will become the first state to mandate “paid prenatal personal leave” specifically for pregnant employees, as we discussed here. 
• Non-Compete Restrictions:
• California has introduced stricter laws voiding non-compete agreements that do not meet specific exceptions, setting a trend for other states. More details are available in our client alert here.
• Maryland enacted a law expanding restrictions on the enforceability of non-compete and conflict of interest provisions in employment contracts with veterinarians and certain healthcare professionals. More details are available in our client alert here.
• Captive Audience Meeting Bans: States like California, Illinois, and Washington have enacted laws prohibiting employers from mandating attendance at meetings aimed at discouraging unionization, reflecting a growing trend toward protecting workers' rights to organize. While Washington State’s ban is already effective, Illinois and California’s ban will take effect in January 2025.

With further changes on the horizon for 2025, employers should proactively align their policies, agreements, and handbooks with these shifting requirements to stay ahead of the curve. For assistance, please contact one of Honigman’s Labor and Employment Attorneys here.