Legislative Updates

On November 15th, the U.S District Court for the Eastern District of Texas struck down the Biden Administration's overtime rule.  The initial rule expanded overtime pay by requiring employers to pay salaried workers a minimum of $43,888 per year as of July 1, 2024.  The threshold was set to rise to $58,656 as of January 1, 2025.  The white-collar exemptions threshold of $35,568 ($684/week) set in 2019 under the Trump administration is set to go back into effect.   

The Biden Administration recently proposed a rule which could require insurers to expand coverage to over-the-counter birth control including oral contraceptives, condoms and emergency contraception at no cost for those with private insurance.  Health plans currently cover the cost of contraceptives prescribed to members.  The new rule would allow coverage for members without the need for a prescription including contraceptives and the morning after pill.  There will be a 60-day public comment period, and the proposed rule could go into effect in 2025.  

On October 22, the IRS announced that the 2025 medical flexible spending limit will increase to $3,300 which is up $100 from 2024.  Dependent care limits remain at $2,500 for those married and filing separately or $5,000 for those single or married filing jointly.  

The Internal Revenue Service (IRS) announced that the affordability percentage will be 9.02% for 2025.  The affordability percentage is used to determine the threshold at which the cost of health insurance coverage is considered affordable under the Affordable Care Act (ACA).  Coverage will be considered affordable if an employee's self-only coverage does not exceed 9.02% of household income for 2025.  The 2024 affordability factor was 8.39%.  

The US Court of Appeals for the Fifth Circuit recently struck down the DOL's 2021 regulation which set strict limits on the amount of time tipped employees could spend performing work not related to generating tips.  The DOL issued a final rule in 2021 (often referred to the 80/20 rule) which limits the amount of time an employee can spend on work that does not generate tips to 20% of their hours in a workweek.  The ruling is considered a win for the restaurant and hospitality industry.  

On 8/20/24, a Federal Judge in Texas ruled in favor of barring the Federal Trade Commission's non-complete rule which was scheduled to go into effect on 9/4/24.  The ruling means that businesses do not need to comply with the FTC's rule which banned non-compete agreements.  Judge Ada E. Brown for the US District Court said indicated that the FTC lacks statutory authority in the matter.

USCIS recently updated the Form I-9 Form to extend the expiration date to 5/31/2027.  The edition of the Form I-9 is dated 8/1/23 which may also have an expiration date of either 7/31/26 or 5/31/27.  Employers are encouraged to update their forms to the version with the 5/31/27 expiration date.  However, either form may be used until the expiration date.  

On July 25th, the Employer Participation in Repayment Act (H.R. 9164/S. 4778) was introduced which would permanently allow employers to voluntarily provide up to $5,250 of tax-free student loan repayment educational assistance to employees under IRS Code Section 127.  The current benefits are set to expire on January 1, 2026.  

The US Department of Labor released a proposed rule earlier this month that will protect workers against heat related injuries if it is finalized.  The proposed rule would require employers to develop an injury and illness prevention plan to control heat hazards in workplaces affected by excessive heat.  Employers would need to evaluate heat risks and implement requirements for drinking water, rest breaks and of indoor heat.  Training would need to be provided by employers as part of the plan.  Employers would also need to have a plan in place to respond to worker experiencing heat-related symptoms.  The public is encouraged to submit comments on the rule in the Federal Register and anticipates a public hearing after the written comment period.

The Supreme Court issued a ruling today in a case with Starbucks that the National Labor Relations Board (NLRB) did not use the correct standard when they sought an injunction after Starbucks fired 7 workers who claimed they were fired in retaliation for union-organizing in Memphis.  The injunction allowed the fired workers to return to their jobs during an NLRB investigation.  The court ruled that the NLRB should have used a stricter four-factor test instead of the relaxed two-factor test when applying for an injunction which could make it more difficult to return employees to work during investigations.