5 Employment Policies to Review in 2024
February 29, 2024
5 Employment Policies to Review in 2024

Employee handbooks are important tools for establishing employee expectations, addressing workplace issues and defending against potential lawsuits. Failing to update the employment policies in these handbooks regularly can make employers vulnerable to legal risks and liabilities, resulting in costly fines, penalties and attorneys’ fees. Employment laws are often complicated, and employers must be aware of new regulatory developments that may impact their organizations and workforce. The start of the year provides employers with an excellent opportunity to review and update their policies.


To assist with this effort, this article explores five employment policies employers should consider reviewing in 2024.


1. CROWN Act

In 2023, many states and localities enacted laws prohibiting discrimination based on an individual’s hair texture and style associated with a protected class, such as race. As of September 2023, 23 states had passed the Creating a Respectful and Open World for Natural Hair (CROWN) Act. Additionally, the U.S. Virgin Islands and more than 40 localities have passed CROWN laws. Many states that have not passed a CROWN Act have filed or pre-filed similar legislation. CROWN laws generally forbid discrimination based on hair textures or protective hairstyles commonly associated with a protected characteristic, such as race, national origin and ethnicity. Looking ahead, the U.S. Equal Employment Opportunity Commission (EEOC) has signaled that it will pursue discrimination claims related to hair texture and style.


As many states and localities adopt hair discrimination laws, employers must ensure their workplace dress code policies are current and comply with state and local laws. It is critical to review existing policies to ensure they accommodate different hairstyles by not banning or restricting certain hair textures and styles that are associated with race, national origin and ethnicity.


2. Pregnant Workers Fairness Act

The Pregnant Workers Fairness Act (PWFA), signed into law on Dec. 29, 2022, became effective on June 27, 2023. Under this law, employers with at least 15 employees must provide reasonable accommodations to workers with known limitations related to pregnancy, childbirth or related medical conditions unless the accommodation will cause the employer an “undue hardship.” The EEOC has started accepting charges under the PWFA for situations occurring on June 27, 2023, or later.


The number of lawsuits claiming employers failed to accommodate pregnant workers will likely increase in 2024. As such, employers should review and familiarize themselves with this law. Savvy employers will look at the EEOC’s final PWFA regulations and consider including a policy in their 2024 employee handbook that explicitly addresses PWFA accommodations. Moreover, forward-thinking employers will increasingly engage in the interactive process with covered employees and applicants who require accommodations under PWFA.


3. Noncompete Agreements

In January 2023, the Federal Trade Commission (FTC) proposed a rule banning most noncompete agreements. The FTC is expected to vote on this rule in April 2024. Additionally, about six months after the FTC announced its proposed rule, the National Labor Relations Board stated that most noncompete and nonsolicitation agreements violate the National Labor Relations Act. Many states have also passed noncompete bans or taken action to ensure noncompetes are unenforceable.


Due to the shifting legislation surrounding these policies, employers need to ensure their noncompete agreements are tailored to the state and locality where their employees work. Moreover, employers can consider limiting or eliminating noncompete agreements and policies to avoid potential litigation and unnecessary enforcement hurdles.


4. Form I-9

In 2023, the U.S. Department of Homeland Security’s (DHS) Citizenship and Immigration Services published an updated Employment Eligibility Verification form (Form I-9) and instructions. The DHS also issued a final rule that will amend agency regulations to allow for the authorization of alternative document examination procedures, such as remote documentation verification and examination. Employers had to start using the new form as of Nov. 1, 2023, to avoid penalties.


Complying with Form I-9 requirements is often challenging and places a significant administrative burden on employers. Failing to complete and retain Forms I-9 for all employees can be extremely costly. Form I-9 violations often can lead to additional fines and penalties from other government agencies. While the required timelines for completing Forms I-9 for employees haven’t changed, the updated form will likely force employers to make some changes to their Form I-9 operations and processes. Therefore, employers should familiarize themselves with the updated form and establish a plan for implementing the required changes. Savvy employers will also train employer representatives and communicate with employees about plan updates. Due to the complexities of complying with Form I-9 requirements, employers are encouraged to seek legal counsel to discuss specific issues and concerns.


5. FLSA Overtime and Minimum Wage Exemptions

On Aug. 30, 2023, the U.S. Department of Labor (DOL) announced a proposed rule to amend current requirements that executive, administrative and professional employees must satisfy to be exempt from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime requirements. With this rule, the DOL proposes increasing the minimum salary level from $684 to $1,059 per week (from $35,568 to $55,068 per year) and from $107,432 to $143,988 per year for highly compensated employees. The rule would also enable the DOL to update salary levels automatically every three years without relying on the rulemaking process. The final overtime rule is expected to be released in April 2024.


While the proposal doesn’t impose any new requirements on employers until the rule is published, proactive employers will review the FLSA’s proposed rule and evaluate the changes needed to remain compliant with the new law. This may include reviewing employee compensation, auditing exempt employees’ job duties and revising workplace policies to ensure compliance.


Summary

Outdated policies can often expose organizations to unnecessary legal risks. Regularly reviewing and updating employment policies is an effective and cost-effective way for employers to protect themselves. By understanding the most important rules and regulations to study in 2024, employers can take steps to ensure their employment policies are current and reflect the most recent regulatory developments.



For more workplace resources, contact Simco today.

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Top 5 HR Trends That Will Shape Businesses in 2025

January 7, 2025
As 2025 kicks off, the HR landscape is evolving faster than ever before. Technology, shifting workforce expectations, and the need for businesses to be agile in a dynamic global environment are all driving change. What worked yesterday may not be enough today, and companies must adapt to stay ahead. Here are the top five HR trends you’ll need to watch closely in 2025: 1. AI is Changing the Hiring Game Artificial intelligence is no longer just a buzzword in HR—it’s a game-changer. Tools that can scan resumes, match candidates to roles, and even conduct initial assessments are becoming staples for businesses aiming to save time and improve hiring outcomes. In 2024, many organizations began integrating AI to remove unconscious bias and make their hiring practices more inclusive, and this trend is expected to accelerate. 2. Flexibility Isn’t Just a Perk Anymore Hybrid and remote work models are here to stay, but the conversation has shifted. In 2025, it’s less about offering flexibility and more about making it work effectively. Companies are adopting sophisticated tools for remote collaboration, redefining performance metrics, and ensuring policies address the nuances of managing both in-office and remote teams. The focus is on maintaining productivity without compromising employee well-being. 3. Wellness Goes Beyond Gym Memberships In recent years, wellness programs have evolved beyond basic offerings like gym memberships to address a wider range of employee needs. As companies recognize the link between employee well-being and productivity, they’re broadening their focus to include mental health, financial stability, and holistic support. In 2023 and 2024, for example, Delta expanded its employee wellness initiatives by improving access to mental health care. The airline worked with Spring Health, a new EAP provider, to create a larger and more diverse network of mental health professionals, offering better support for both employees and their household members. Looking ahead to 2025, wellness will become more deeply integrated into company cultures. Expect companies to go beyond providing reactive support to fostering proactive wellness through personalized tools, such as mental health apps, financial coaching, and enhanced benefits like paid leave for caregiving. With these programs, businesses are not just addressing immediate health concerns but also empowering employees to manage their overall well-being in a more holistic way. The focus will be on creating a supportive, sustainable work environment that helps employees thrive both at work and in their personal lives. 4. Upskilling is a Competitive Necessity Technology is evolving faster than ever, and companies are racing to keep up. Upskilling employees in areas like data analysis, AI, and emerging tech became a priority in 2024, and it’s clear that this trend will only grow. Businesses that invest in continuous learning programs—whether through certifications, on-the-job training, or digital learning platforms—are better positioned to stay ahead in their industries. 5. Data is Driving HR Decisions HR is leaning heavily on people analytics to guide decision-making. Instead of relying on intuition, businesses are using data to understand employee engagement, pinpoint reasons for turnover, and improve productivity. The emphasis on metrics like employee sentiment and workforce utilization gained traction last year, and more organizations are embedding analytics into their HR strategies to tackle challenges proactively. Final Thoughts The HR landscape in 2025 will be shaped by these transformative trends. Businesses that embrace innovation and prioritize their people will find themselves not just adapting but thriving in the evolving workplace. As these trends unfold, staying proactive and flexible will be the key to turning challenges into opportunities.

IRS Announces 2025 PCORI Fee Update

January 6, 2025
The IRS has released the 2025 Patient-Centered Outcomes Research Institute (PCORI) fee , which will increase to $3.47 per covered life —a $0.25 increase from 2024. This fee applies to plan years ending on or after October 1, 2024 , and before October 1, 2025 . What is the PCORI Fee? The PCORI fee was introduced as part of the Affordable Care Act (ACA) to help fund the research conducted by the Patient-Centered Outcomes Research Institute (PCORI). This research focuses on improving healthcare outcomes by comparing different medical treatments. The fee is levied on insurers, as well as self-insured and level-funded health plans. The fee is calculated based on the average number of covered lives under a plan and is due once a year, with the filing occurring during the second quarter on Form 720 , the Quarterly Federal Excise Tax Return . The payment is due by July 31 each year. Key Details for Employers and Plan Sponsors Who is Affected? : The fee applies to health insurers, self-insured health plans, and level-funded health plans. When is it Due? : The fee must be reported on Form 720 and paid by July 31 each year. How is it Calculated? : The fee is based on the average number of covered lives during the plan year. The updated $3.47 per covered life fee will be in effect for health plans with policy years ending between October 1, 2024, and October 1, 2025. Employers should be prepared to account for this increase when filing for 2025. For more information on the PCORI fee and its reporting requirements, consult the IRS Bulletin 2024-49 , published on December 2, 2024, or visit the IRS PCORI Fee page . 

Federal DOL Restores Simplified Tip Credit Rule: Employer Guidance

January 6, 2025
In a move welcomed by many employers in the hospitality and service industries, the U.S. Department of Labor (DOL) has officially reinstated the pre-2021 tip credit rule. This change, effective December 17, 2024, follows a recent court of appeals decision that vacated the “80/20/30” tip credit rule that had been implemented under the Trump administration. If you’re wondering what this means for your business, don’t worry—this update doesn’t require any immediate action on your part. What Was the "80/20/30" Rule? Before we dive into the implications of the DOL’s latest rule change, let’s quickly review the "80/20/30" rule. This rule, introduced in 2021, placed specific restrictions on how much time tipped employees (such as waitstaff and bartenders) could spend on non-tip-generating duties (e.g., cleaning, setting up, and other side work). The rule essentially required that tipped workers spend at least 80% of their work hours on tip-generating activities to continue qualifying for the tip credit. Moreover, under the "80/20/30" rule, employers could no longer use the tip credit to offset wages for certain non-tip-producing activities, and they had to ensure that employees spent no more than 30 minutes at a time on side duties. This increased the burden on employers, as it required more careful tracking of employee duties and work hours to remain in compliance. Why Was the Rule Vacated? The court of appeals decision in August 2024 ruled that the "80/20/30" rule was too restrictive and inconsistent with the intent of the Fair Labor Standards Act (FLSA), which allows employers to take a tip credit for workers who perform both tipped and non-tipped duties. The court found that the new rule created unreasonable administrative burdens and restrictions that were not in line with past practices or legal precedents. In response to this ruling, the DOL moved quickly to restore the pre-2021 tip credit rule. What Does the Reinstatement of the Pre-2021 Rule Mean for Employers? With the reinstatement of the pre-2021 tip credit rule, the DOL has effectively simplified the way employers can apply the tip credit to their workers. Under the prior rule, employees who perform a combination of tipped and non-tipped duties can still qualify for the tip credit, as long as their primary job responsibility is related to tipped work. Employers no longer have to track the precise breakdown of time spent on tip-generating vs. non-tip-generating activities in the same way. This returns to the more flexible guidelines where as long as tipped employees perform "related" duties (e.g., cleaning their station, setting up for service), they can still receive the tip credit for those hours, provided those activities don’t dominate their workday. What Action Is Needed from Employers? For most employers, this change will not require any immediate action, as the final rule effectively restores the pre-2021 approach. The main thing to note is that employers should continue to comply with the broader requirements of the Fair Labor Standards Act (FLSA) and ensure they are properly paying employees at least the federal minimum wage (including tips) when they apply the tip credit. Here are a few things to keep in mind: Reassess Timekeeping Systems: While the rule change simplifies some aspects of record-keeping, employers still need to ensure they have a timekeeping system in place that accurately tracks the hours worked by tipped employees. It is essential to ensure that the wages (base pay plus tips) equal at least the federal minimum wage. No Need for Immediate Adjustments: If you were already applying the pre-2021 tip credit rule, no changes are necessary on your part. For those who had adjusted to the "80/20/30" rule, reverting back to the previous method should not require significant changes. State and Local Laws: Employers should still be mindful of any state or local laws that may have stricter requirements than federal law. Always check your state’s labor regulations to ensure full compliance. Why Is This Change Important? The reinstatement of the simplified tip credit rule provides relief to many employers, particularly in industries like restaurants, hotels, and other service-based businesses where tipping is common. The pre-2021 rule is seen as more employer-friendly, offering more flexibility in how tipped employees can spend their time without losing eligibility for the tip credit. For employers, this means less administrative burden, reduced risk of compliance issues, and potentially fewer legal challenges. This shift is a step toward simplifying labor law compliance for businesses already struggling with the complexities of wage and hour rules. Looking Ahead As we move further into 2025, it’s important for employers to stay informed of any future changes in federal labor regulations. While this change restores a previous rule, the DOL’s stance on tip credits and wage issues can continue to evolve. Employers in tip-dependent industries should continue to monitor updates from the Department of Labor and legal rulings to ensure ongoing compliance. The DOL’s restoration of the pre-2021 tip credit rule is a welcome change for many businesses, offering a return to simpler guidelines and less restrictive requirements. For most employers, no immediate action is required, but it’s always a good idea to review your practices to ensure they align with the updated rule. If you need further assistance in navigating these changes, reach out to Simco to ensure your business stays compliant in 2025 and beyond. 

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