As the seasons change, so do manufacturers’ priorities. Fall is typically one of the busiest hiring periods of the calendar year, so many manufacturers are likely bracing themselves for this challenge. That said, there were several significant labor and employment updates this spring and summer of which manufacturers should be aware; below are four key trends that may require action to ensure compliance.

1. Worker Classification – Independent Contractor Versus Employees

Earlier this year, the U.S. Department of Labor (DOL) issued a final rule regarding employee and independent contractor status under the Fair Labor Standards Act (FLSA). The new rule, which took effect March 11, 2024, adheres to a “totality of the circumstances” approach and involves consideration of six factors. Manufacturers who rely on independent contractors to perform work and provide services should consider reviewing those relationships to ensure they are adequately characterized as independent contractors rather than employees.

2. Salary Threshold for Exempt Employees Increasing

This past spring, the U.S. DOL issued a final rule that included raising in the federal minimum salary threshold for exempt employees. Previously, the salary threshold for executive, administrative, and professional employees was $684 per week (or $35,568 per year). Effective July 1, 2024, however, the salary threshold became $844 per week ($43,888 per year), and on January 1, 2025, it will once again rise to $1,128 per week ($58,656 per year). The final rule also states that the threshold will increase on July 1, 2027, and every three years thereafter. Manufacturers should review these thresholds, as well as any state or local thresholds that may exist to ensure compliance and prepare for the January 1, 2025, increase.

3. Pay Transparency Laws

Pay transparency laws, including those requiring employers to provide the pay range to applicants, candidates, and employees or to include it in job postings, continue to be passed in states nationwide. On July 31, 2024, Massachusetts passed a law requiring employers to include a “pay range” in all job postings, including those posted by third parties, such as recruiters. Massachusetts joins several other states, including Washington, DC, which passed a similar law that recently took effect on June 30, 2024; Maryland, which passed a law taking effect on October 1, 2024; laws in Minnesota and Illinois that both take effect on January 1, 2025; and a Vermont law will take effect on July 1, 2025. Notably, the Massachusetts law also contains pay data reporting requirements for employers that are subjected to annual federal Equal Employment Opportunity (EEO) report requirements, which includes many manufacturers. Specifically, covered manufacturers must submit an annual report of pay data categorized by race, ethnicity, sex, and job category to the Secretary of the Commonwealth, with the first report due no later than February 1, 2025. Manufacturers might consider reviewing the pay transparency and pay data reporting laws in the states in where they employ employees or engage in recruiting.

4. Paid Sick Leave Laws

While paid sick leave has been trending for a number of years, there have been significant developments in recent months. In Connecticut, the sick leave law was recently expanded significantly, and now nearly all private employees are entitled to such leave. New York has also recently become the first state in the nation to enact paid prenatal leave benefits for pregnant workers. Specifically, effective January 1, 2025, pregnant workers will be entitled to up to 20 hours of paid leave in a 52-week period to attend prenatal medical appointments and procedures. This leave is not accrued; rather, it must be immediately available to employees, and it is in addition to the paid sick and safe leave to which employees are already entitled. Manufacturers who are multi-state employers should consider engaging in a comprehensive review of their PTO and sick leave policies to ensure compliance with these recent advancements.

Copyright © 2024 Robinson & Cole LLP. All rights reserved. by: Abby M. Warren, Madison C. Picard of Robinson & Cole LLP For more news on Employment Law Trends for Fall 2024, visit the NLR Labor Employment section.