Workforce Mobility Act, 2020 FLSA Overtime Update Deadline, Workplace Investigation Tips, and More

On November 14, 2019, the U.S. Senate Committee on Small Business and Entrepreneurship held a hearing on a recently-introduced bill titled, The Workforce Mobility Act. If enacted, the bill would effectively ban non-compete agreements under most circumstances. The bill appeared to garner bipartisan support during the hearing, following the testimony of the expert witness. The speakers testified that they believed that employers could use less intrusive means, other than non-compete agreements, to protect business interests, offering alternatives such as nonsolicitation agreements, confidentiality agreements, and existing trade secret laws. The speakers also recommended that if an employer uses non-compete agreements, the employer should be obligated to pay employees for the so-called “shelf time” the employees would be out of the market during the period of the non-compete.

On January 1, 2020, the Fair Labor Standard Act’s (FLSA) new salary tests for exempt employees must be applied, making approximately 1.3 million previously exempt American workers eligible for overtime pay. Employers should make sure that any individual currently classified as exempt meets the new exemption test as of January 1, 2020. Additionally, individuals who are earning less than that new salary level and who will not be brought up to that level should be converted to non-exempt hourly paid employees. Employers should speak to legal counsel before making any changes, as the changes may have implications in terms of both legal risk and workforce morale.

The Equal Employment Opportunity Commission (EEOC), the National Labor Relations Board (NLRB), and the Department of Labor (DOL) will all soon publish their positions on joint-employer status. The NLRB’s coming rule or regulation will likely indicate that two employers can be deemed to be joint employers under the National Labor Relations Act, where one of the employers exerts substantial direct and immediate control over the essential terms and conditions of employment — such as hiring or firing, discipline, etc. — of the second company’s employees. The EEOC’s joint-employer rule may or may not be similar to the NLRB’s, as may the Department of Labor’s. In any event, employers can expect to see more developments on this front in early 2020.