Inside the rapidly changing world of compliance

When it comes to federal overtime law, the past decade has entailed a certain degree of whiplash for employers. 

First came the U.S. Department of Labor’s Obama-era overtime rule, which attempted to raise the minimum wage threshold for overtime under the Fair Labor Standards Act to $47,476 per year — a rule struck down Nov. 22, 2016, just days before it was set to take effect. That kept the overtime threshold at $23,660. Then, in 2019, DOL announced a rule that set the threshold at $35,568 — a rule that did take effect the following January.

DOL finalized yet another change under the Biden administration: The two-prong 2024 rule, which raised the threshold to $43,888 on July 1 and would have raised it to $58,656 on January 1. But then U.S. District Court Judge Sean Jordan vacated the rule, setting the overtime threshold back to the standard set during the Trump administration: $35,568.

With the administration changing parties again, what do employers need to know about how DOL will proceed? And what should they do about the changes they made to prepare for the now-reversed change in July?

Rule is likely ‘dead’

While DOL has the right to appeal the decision — and may yet do so — the outcome is unlikely to change for a number of reasons, Brett Coburn, partner at Alston & Bird, told HR Dive. 

For one, the 5th U.S. Circuit Court of Appeals, where such an appeal would land, is the “most conservative circuit,” he said, likely making for a unsympathetic hearing. While the 5th Circuit recently upheld DOL’s use of a salary basis test to determine pay eligibility, that doesn’t mean it would be likely to reverse in this case, Coburn added.

Additionally, as DOL changes hands to an incoming Trump administration, the agency would almost certainly withdraw any appeal filed during the lame duck period.

Employers can “assume the rule is dead, but keep your ear to the ground,” Coburn said.

What about that July adjustment?

While the rule may now be dead, many employers made classification or wage changes to comply with DOL’s raising of the threshold in July (with at least one exception: the Texas state government). What should they do about those raises or reclassifications?

Probably very little, both Coburn and Chuck McDonald, co-chair of wage and hour practice at Ogletree Deakins, told HR Dive. 

Theoretically, an employer that raised workers’ salaries to keep them exempt from the overtime rule could lower those salaries back down, but purely from an employee relations standpoint, McDonald said, the approach would not be advisable.

Coburn also cautioned against dropping workers’ nonexempt status too quickly or without careful consideration. 

“People who are in this [salary] range … are the people who are in a gray area as to whether their duties are exempt or not,” he said, referencing the various job requirements workers must meet — in addition to the salary basis — to be exempt from overtime pay. The duties test can be a trickier process to navigate for employers.

Given that such workers “may not be comfortably exempt from a duties perspective,” reclassifying them a second time could potentially prompt them to talk to a lawyer, Coburn said. “You may, by trying to save a little bit, be inviting litigation.”

Managing January plans

Outside of standard annual salary adjustments, employers can comfortably shelve their plans to reclassify employees or change salaries come January, the attorneys said.

Given the rule was vacated a month and a half ahead of time — rather than a week, as in 2016 — organizations were likely more prepared for this outcome than some of the other decisions handed down this year.

“It’s not like the FTC noncompete rule,” Coburn said, “where people were waiting with bated breath.” (That rule was struck down Aug. 20, just two weeks from when it was set to take effect.)

“Most of what I’ve heard is: ‘We’re glad we’ve heard it sooner rather than later,’” McDonald said.

While employers are likely relieved, Coburn noted one down side: The January change may have been a useful way for employers to review and make some classification changes that needed to happen regardless. 

“You don’t get a lot of opportunities to make changes without inviting questions,” he said. “This would have provided some explanation.”

HR professionals should audit their Form I-9s immediately, experts recommended in a Nov. 21 webinar.

Uncertainty abounds regarding the second Trump administration’s priorities, “but one certainty … is enforcement of I-9 regulations and processes,” said David Adams, counsel at Cozen O’Connor. “I-9 audits are coming. That is a guarantee.”

Best practices

Employers must have all new hires complete Form I-9 and maintain those records, the webinar presenters explained. And while the form may appear straightforward, mistakes are common, they said.

That becomes a problem when the federal government arrives to conduct an audit; officials have been very serious about the details, they said.

To head off enforcement actions, employers should conduct Form I-9 self-audits, they suggested, and transparently correct any mistakes. That includes correcting dates, adding missing documentation and more — all with diligent notes about the fix.

“If you go through an I-9 audit by the government, your fines will be less if you show effort that errors were identified and previously corrected, as opposed to falsifying documents,” Adams said.

Enforcement predictions

Employers should conduct these reviews immediately, Adams urged: “Don't wait until January.”

“If you don't have a strong and consistent and efficient I-9 program in place right now, that will be exposed under the new administration,” he said, in part because of Trump’s “border czar” Tom Homan, a former U.S. Immigration and Customs Enforcement director.

“He's going to potentially use the I-9 program to identify individuals that he thinks should not be in the United States anymore,” Adams said. “That is on the table.”

Even if the self-audit isn’t complete by January, enforcement officials who identify errors may look kindly on the fact that an employer was in the process of looking for and rectifying errors itself.

As for enforcement priorities, officials are likely to start with companies that have had previous violations, Adams said. They likely also will prioritize industries that have historically had significant I-9 violations, he said, such as agriculture and hospitality. “They're going to go after those industries first and try to crack down on those immediately,” Adams said. 

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A final rule issued by the Department of Labor (DOL) revises the salary requirements for determining minimum wage and overtime pay exemptions under the Fair Labor Standards Act (FLSA). This article reviews the rule changes and shares some practical steps small- and medium-sized businesses (SMBs) can implement to ensure compliance with the rule changes. 

Under the FLSA, non-exempt employees must be paid at least the federal minimum wage and at least 1.5 times their regular pay rate for each hour of overtime worked more than 40 hours in a workweek. Section 13(a)(1) of the FLSA provides an exemption from minimum wage and  overtime pay for a “bona fide executive, administrative, or professional” (EAP) employee. 

The DOL applies three tests to determine the EAP exemption: 

• Job duties test: The employee must primarily perform  executive,  administrative, or professional duties 

• Salary basis test: The employee is paid on a salary basis, meaning the employee receives each pay period on a weekly or less frequent basis a predetermined amount of compensation 

• Salary level: The salary must not be less than a minimum salary threshold amount 

Job duties test explained 

The final rule does not change the DOL’s job duties test. To satisfy the duties test for executive exemption, the duties test still requires that: 

• The employee’s primary duty must be “managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise”; 

• The employee must “customarily and regularly direct the work of at least two full-time employees”; and 

• The employee has authority for personnel actions, such as hiring or firing other employees, or whose recommendations as to “hiring, firing, advancement, promotion, or any other change of status of other employees are given particular weight.” 

To satisfy the duties test for the administrative exemption, the employee’s primary duty must be performance “directly related to the management or general business operation of the employer’s customers”; and includes “the exercise of discretion and independent judgment with respect to matters of significance.” 

The professional exemption duties test covers two categories of professionals: 

• Learned professionals: For learned professionals – such as scientists and physicians – the duties test requires that the employee performs work requiring “advanced knowledge” in a field of science or learning that is “predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment.” 

• Creative professionals: For creative professionals – such as musicians, artists, and writers – the duties test requires that the employee performs work “requiring invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor.” 

Certain outside sales employees are also exempt. To qualify, primary duties must include “making sales,” or “obtaining orders or contracts for services or the use of facilities for which a consideration will be paid by the client or customer.” Additionally, the sales employee must be engaged in work away from the employer’s physical places of business. Employees who don’t meet the outside sales exemption may still be exempt under one of the other FLSA exemptions, provided they meet the criteria for the exemption. 

Lastly, exemptions also apply to certain computer-related occupations – such as computer systems analysts, computer programmers, and software engineers – as long as they meet the duties test for this occupation. 

Revised salary exemptions 

While the job duties test remains unchanged, the final rule revises the salary requirements for the EAP exemption. For an employee to meet the EAP exemption, the minimum weekly salary threshold has increased from $684 per week to $844 per week ($43,888 annually), which took effect July 1. Effective January 1, 2025, it will increase to $1,128 per week ($58,656 annually). 

Highly Compensated Employee test 

Additionally, the final rule increases the total annual compensation requirement for highly compensated employees (HCEs). Employees who pass the HCE test must have primary duties including performing office or non-manual work; and customarily and regularly performing at least one of the duties of an exempt EAP employee. 

As of July 1, the HPE is deemed exempt if the employee earns total annual compensation of at least $107,432, including at least $684 per week paid on a salary or fee basis. The prior threshold was $132,964 in annual compensation. On January 1., 2025, it will increase to $151,164. 

“Nondiscretionary bonuses and incentive payments, including commissions, may be counted toward the total annual compensation threshold requirement, but the employer must pay at least the full standard salary level per week – not including such bonuses or incentive payments – on a salary or fee basis to meet the HCE test,” the DOL explained in its Small Entity Compliance Guide. 

The final rule also makes it so that earnings thresholds will be updated every three years, starting July 1, 2027, to “ensur[e] that employers can adapt more easily because they’ll know when salary updates will happen and how they’ll be calculated,” Jessica Looman, administrator for the DOL’s Wage and Hour Division, explained in a blog post. 

Criticisms of the DOL Overtime Rule 

The notice of proposed rulemaking generated approximately 33,000 comments. The U.S. Small Business Administration’s Office of Advocacy and the National Federation of Independent Business (NFIB) expressed concerns with the rule, mainly that the DOL underestimated the economic impact of the overtime rule on small businesses. 

“Small entities have commented that this rule will have detrimental impacts on their operations and increase their payroll,” the SBA stated in a comment letter. “Small entities cannot afford these extra labor costs, as they face a difficult business environment post-pandemic including inflation, supply chain disruptions, shutdowns, and tighter labor markets.” 

The NFIB expressed concern that the time it takes to read, comprehend, and implement the changes unduly burdens small businesses. “The compliance associated with employee classification, timekeeping, and recordkeeping mandated by the FLSA will fall more often than not on the busy business owner or, in some small businesses, an employee who handles back office and administrative tasks,” the NFIB comment letter stated. “These individuals are generally not experts in wading through regulatory text, so familiarization time is greater than for large companies.” 

Compliance measures for SMBs 

Even as the DOL rule faces legal challenges, businesses should prepare by reevaluating their employees’ job roles, salaries, and pay policies and procedures now. “Employers have a range of options for responding to the updated thresholds established in this rule,” said Bridget Dutton, a program specialist within the DOL Wage & Hour Division, during a DOL webinar discussing the rule changes. 

For example, for each employee affected by the increased earnings threshold, an employer may: 

• Increase the salary of the employee to at least the new salary level to retain their exempt status; 

• Pay an overtime premium of 1.5 times the employee’s regular rate of pay for any overtime hours worked; 

• Reduce or eliminate overtime hours; or 

• Reduce the amount of pay allocated to the employee’s base salary, provided that the employee still earns at least the applicable hourly minimum wage to offset new overtime pay. 

Compliance officers, alongside the business, should ensure managers and payroll departments are informed of the rule change, as well as any salary or policy changes that the business makes in response. For additional information, SMBs should review the “Small Entity Compliance Guide” provided by the DOL, which describes in more detail the exemptions that apply, and how to ensure compliance with the rule. 

Staying compliant as an SMB is not without its challenges. To stay on top of your requirements, purpose-built solutions can help make sure nothing falls through the cracks. 

Ready to learn how NAVEX can support your SMB compliance efforts? 

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A recruiter for a midsize Illinois logistics company sits down with her team for a meeting on hiring strategy for 2025. Before the team can discuss how it will build out its candidate pipeline, the talent acquisition lead begins with a presentation on regulatory requirements that will kick in next year.

At the top of that list is Illinois’ new pay transparency law, which is set to take effect on Jan. 1. The law will require all employers in the state with 15 or more employees to include pay ranges and benefits information in all job postings. This includes positions that are advertised via a third party, like a job board.

Jurisdictions in more than a dozen states either currently enforce or plan to enforce some form of pay transparency law. The legislative movement to require disclosure of pay has shaped a broader corporate trend toward transparency in North America, a recent WTW survey found. Still, many are unprepared; results of an Aon study published Thursday found that 75% of U.S. employers were not ready to comply with pay transparency laws.

Because pay transparency cuts to the core of talent operations, HR professionals play a big role in shaping their employers’ approach. HR Dive attended a session at SHRM’s Nov. 20 Workplace Law Forum in Washington, D.C., during which attorneys discussed how HR can prepare for the wave of legal requirements and employee expectations in this space.

Don’t just stop at compliance — create a ‘pay philosophy’

Simply defined, pay transparency refers to the openness with which an organization shares information about its compensation practices, policies and employee salaries, said James Atkinson, VP of thought leadership at SHRM. The degree of transparency can range from disclosure of individual salaries to providing details about pay scales and specific criteria used to determine pay.

Employers subject to pay transparency laws will need to do the basic compliance work: post pay information; inform job candidates and applicants about that information; and provide employees information on promotions where applicable. But more broadly, HR teams should be thinking through what their pay philosophy is because of the rise in transparency, according to Mary Beard, VP of employment and litigation counsel at Ardent Health.

“These laws are empowering employees to be more bold and ask questions more broadly about their compensation,” Beard said. “Compensation used to be a taboo in the workplace. No one discussed their pay. But with these pay transparency laws, with ranges being posted on the job postings, it’s really a question that our HR teams have to answer.”

A pay philosophy has two parts: initial pay and pay for performance, Beard said. As part of this work, employers should determine what factors will be considered at each stage. For initial pay, this typically includes education and experience, while pay-for-performance models can include market median for pay, top-of-the-market pay for key revenue-generating talent, merit-based increases, or variable pay programs such as bonuses and stock options.

“Just make sure that whatever incentives you provide really are tuned to engaging and increasing the performance of your employees,” Beard said.

Such strategies have the benefit of establishing clear guidelines that reassure employees that pay is not based on illegitimate factors such as favoritism or nepotism, said Stephen Malone, head of global employment law at Peloton. HR can bolster those guidelines, he added, by benchmarking against industry peers and using market data to add “rigor” to pay bands.

Be proactive in pursuing equal pay

Pay transparency laws have the goal of creating equal pay for equal work, but some states have broadened the definition of equal pay to mean equal pay for substantially similar or comparable work, which can be a key distinction, according to Annette Tyman, partner at Seyfarth Shaw. That puts the onus on employers to identify which jobs may perform similar duties and be used as comparators when determining pay, she added.

Another element of equal pay analysis is determining what may constitute a wage disparity, per Tyman. Employers may have the mindset that only statistically significant differences in pay between employees qualify as disparities, but in a pay discrimination lawsuit, a court may not find that distinction persuasive.

“That might be what we’re starting with, from a [place] of ‘how bad is it?’ But really, the law says ‘equal’ pay,” Tyman said. “Equal is not within a difference of statistical significance.”

A proactive approach can help employers ensure practices are equitable, the panelists said. Beard told attendees that a good first step is to confirm that pay policies contain nondiscrimination and nonretaliation language as well as language confirming to employees that the employer takes all applicable pay transparency laws into consideration.

Beard said employers can also provide training to managers and HR staff to ensure they understand compensation policies. HR also may need to make note of any applicable salary history question ban laws that could affect recruiting.

Be careful when deciding whether to do a pay equity audit

Performing a pay equity audit can help employers measure their progress if used carefully and appropriately, Malone said, adding that audits also can help employers defend from pay equity claims and litigation or demonstrate a public commitment to equity should they decide to publish the results.

“When you’re doing a pay equity audit, you’re peeling back the layers of that onion and trying to understand [if] there is an inappropriate disparity,” he said.

To that end, audits should probably be conducted in conjunction with legal counsel under attorney-client privilege — or, potentially, work-product privilege — to ensure that any negative or embarrassing findings are protected from disclosure, Malone said. He noted that employers should decide the audit’s scope in advance, including whether it will take into account factors such as geography, gender and race.

The potential downside of an audit, however, is that the results may not always be actionable, especially if an employer cannot afford to close any revealed discrepancies. “If you do not have a budget to actually pay for the discrepancies that you’re going to find — because you will find discrepancies — I would advise you not to do the audit itself,” Beard said.

Separately, employers also may want to consider performing job description audits, which are meant to ensure that those descriptions accurately reflect employees’ essential job duties, as well as Fair Labor Standards Act classification audits to determine whether employees are properly classified as exempt or nonexempt from earning overtime pay, Beard said.

Federal enforcement of new workplace protections for pregnant workers is picking up steam, just as regulations implementing those requirements reach 100 days on the books.

The U.S. Equal Employment Opportunity Commission filed its first lawsuit alleging violations of the Pregnant Workers Fairness Act earlier this month and recently followed it up with two more.

Accommodation a common thread

In the first lawsuit, EEOC v. Wabash National Corporation, the commission alleged an employer denied a pregnant employee’s accommodation request to transfer to a role that didn’t require lying on her stomach. She eventually resigned at eight months pregnant, according to EEOC. 

The most recent complaints, EEOC v. Polaris Industries, Inc., and EEOC v. Urologic Specialists of Oklahoma, Inc., similarly focused on the law’s accommodation requirement.

In the former, the employer allegedly refused to excuse an employee’s absences for pregnancy-related conditions and medical appointments, and required her to work mandatory overtime despite a doctor’s restriction. It threatened the employee with termination if she was absent again, so she resigned to avoid termination, EEOC claimed.

In the latter case, the employer allegedly refused to allow an employee to sit, take breaks or work part time as her doctor required for the final trimester of her high-risk pregnancy. The employer instead forced her to take unpaid leave, EEOC said.

Employer takeaways

While challenges to EEOC’s PWFA regulations make their way through court, employment law attorneys have generally urged compliance.

HR professionals may want to take particular note of the accommodation mandate which, unlike the Americans With Disabilities Act, doesn’t have a severity threshold for pregnancy-related accommodations.

In other words, “a worker with a healthy and normal pregnancy could seek and receive an accommodation under the PWFA,” Emily Litzinger, a partner at law firm Fisher Phillips, said in a recent analysis.

Employers are expected to engage in an interactive process with the employee seeking accommodation, and EEOC’s regulations specifically prohibit employers from requiring an employee to accept a modification “other than any reasonable accommodation arrived at through the interactive process.” The statute itself prohibits an employer from requiring a covered employee to take leave, whether paid or unpaid, if another reasonable accommodation can be provided.

Other charges in EEOC’s three lawsuits included alleged missteps around medical documentation. According to the commission, employers cannot request documentation if the need is obvious — a request for a larger uniform due to pregnancy or to sit, for example.

Heading into the new year, there are several changes to California’s employment laws employers should note, Cozen O’Connor attorneys said in a recent webinar.

Among other things, the Golden State has made changes to requirements for wages, sick leave and captive audience meetings, they said.

Local enforcement of discrimination claims (SB 1340)

Employers in California can expect to see local governments enforcing certain state nondiscrimination laws, Elena Hillman, member of the firm, said. The law allowing them to do so was passed because the state’s civil rights department cannot keep up with the volume of complaints being filed, she explained.

“It’s a big deal in that we might start seeing a lot more enforcement actions from these local agencies,” Hillman said.

Intersectional nondiscrimination protections (SB 1137)

The concept of intersectional discrimination has been recognized elsewhere — such as the U.S. Equal Employment Opportunity Commission — but now California has outlawed it at the state level. This means, Hillman said, that even if an employee is unable to show age or sex discrimination individually, they could successfully allege bias based on the fact that they’re an older woman, for example.

Employers should revise their policies to anticipate that discrimination can be on the basis of the combination of factors, Hillman suggested; and when faced with a claim that requires investigation, HR should take care to look at the big picture, because this expands the ability to claim disparate treatment.

Driver’s license requirements (SB 1100)

California has put greater impositions on employers who try to indicate in their job posting that a driver’s license is necessary for the job, Hillman said.

To eliminate a potential employment barrier for some workers, the law requires that if an employer indicates that a license is required, it must: (1) reasonably expect driving to be one of the job functions for the position; and (2) reasonably believe that satisfying the job function via an alternate form of transportation — such as bicycling, walking or using a ride-share service — would not be comparable in travel time or cost.

Expanded protections for victims of violence (AB 2499)

AB 2499 is focused on expanded protections for victims of violence but also deals with jury leave, witness leave and court subpoena leave, Hillman said.

For example, it prohibits discrimination or retaliation against an employee who takes time off to obtain a temporary restraining order or secure a safe place to live.

Hillman recommended covered employers brush up on the law’s notice requirements and draft a policy outlining the various accommodations and time to which employees are entitled. 

Hiring requirements for freelancers (SB 988)

For freelancers receiving at least $250 from an employer, the law requires a written contract, according to Nicole Herter Perkin, member of the firm.

The law spells out what must be included in that contract and creates recordkeeping requirements, she said.

Captive audience meeting restrictions (SB 399)

Following the lead of several other states, California created protections for employees who decline to attend employer-sponsored meetings about political or religious matters, including information sessions regarding labor organization.

“You want to make sure that your policies are updated and that you’re training your supervisors and your managers to know that they cannot require employees to sit and listen to these sorts of meetings anymore,” Herter Perkin said. And, if an employer offers a meeting on a political or religious topic, it’s important to document that anyone who attended did so of their own volition, she added.

She also added that challenges to this requirement are “very possible.”

Changes to paid family leave (AB 2123)

California previously allowed employers to require that employees use up to 2 weeks of any accrued but unused vacation before receiving paid family leave benefits from the state. This law eliminates that option.

Practically, Herter Perkin said, “you could have employees coming back from a paid family leave where they were receiving wage replacements through the [Employment Development Department], and then come back to significant vacation still on the books, whereas before, employers were kind of able to tap into that vacation a bit.”

Voluntary social compliance audits (AB 3234)

This law doesn’t mandate social compliance audits but requires employers who voluntarily subject their business to one to post detailed findings to the company’s website.

The law defines such an audit as inspections of any production house, factory, farm or packaging facility of a business to verify that it complies with social and ethical responsibilities as well as health and safety regulations regarding child labor, according to the presenters. 

“The child labor component is really kind of the driving force behind this law,” Herter Perkin said; “there’s been a significant uptick in claims and investigations regarding child labor.”

Retaliation Poster (AB 2299)

The law requires employers to post a list of employees’ rights and responsibilities under California whistleblower laws.

The state’s Division of Labor Standards Enforcement has made available a poster that it said should meet the law’s requirements. 

Wage changes

California’s minimum hourly wage will increase from $16 to $16.50 in the new year.

And if approved, Proposition 32 would raise the minimum wage to $17 for the remainder of 2024 for employers with 26 or more employees, increasing it to $18 per hour in 2025. At press time, the result had not yet been called.

The salary threshold for overtime exemption also will increase to $68,640 on Jan. 1, 2025.

Hillman cautioned employers, however, that certain localities and industries have their own wage requirements, too.

A Texas federal judge struck down the Federal Trade Commission’s ban on noncompete agreements in employment contracts, holding that the ban violates the Administrative Procedure Act and exceeds the agency’s statutory authority. The ruling applies nationwide.

Judge Ada Brown of the U.S. District Court for the Northern District of Texas had already ruled against FTC in Ryan LLC v. Federal Trade Commission last month. Brown preliminarily enjoined the noncompete ban but only with respect to the case’s plaintiffs and plaintiff-intervenors. Her Aug. 20 decision, however, sets the regulation aside entirely, as the APA “does not contemplate party-specific relief,” she wrote.

FTC’s ban had been set to take effect Sept. 4. Brown’s decision splits with that of a Pennsylvania federal judge who sided with FTC on July 23 and declined to block the ban. Last week, a Florida federal judge also issued a limited injunction of the ban, holding that FTC likely exceeded its statutory authority.

The FTC’s noncompete ban targeted contractual clauses that apply to an estimated 1 in 5 U.S. workers by the agency’s own estimates. The rule would have allowed noncompete agreements with certain senior executives prior to the rule’s effective date to remain in force while rendering all other noncompetes unenforceable.

As with other regulatory efforts from the Biden administration, however, the ban was swiftly challenged by employers and business advocates. In addition to the FTC’s ban, those parties also fought the National Labor Relations Board’s joint employer rule as well as the U.S. Department of Labor’s independent contractor and overtime eligibility rules.

In Tuesday’s decision, Brown held that the Federal Trade Commission Act gives the FTC “some authority to promulgate rules to preclude unfair methods of competition” but that the agency “lacks the authority to create substantive rules” such as the noncompete ban. She said this is supported by the fact that Congress did not prescribe sanctions for violations of certain FTC regulations, “which indicates a lack of substantive force.”

Brown also concluded that the FTC’s ban is arbitrary and capricious within the meaning of the APA “because it is unreasonably overbroad without a reasonable explanation.” She said the agency failed to offer evidence for its decision to prohibit all noncompete agreements instead of targeting specific, harmful agreements.

“This is the outcome we have predicted since the FTC first proposed the rule almost two years ago, and we expect it to be upheld on appeal, ultimately by the Supreme Court,” Erik Weibust, member of the firm at Epstein Becker Green, told HR Dive. “This is a perfect example of the judicial system holding unelected bureaucrats to account for their overreach in an area that they have neither the expertise nor Congressional authorization to regulate.”

The Americans with Disabilities Act generally requires that employers provide reasonable accommodations to workers with disabilities.

And while “reasonable” depends on the circumstances, there are three workplace modifications that are unlikely to be reasonable accommodations, according to Daniel Stern, member of the firm at Dykema.

Indefinite leave

“There are some things we can generally rely on,” Stern said in a Sept. 26 webinar. “You really can’t make absolute statements, but indefinite leave [...] has been pretty commonly and consistently, I should say, found to not be reasonable.”

The U.S. Equal Employment Opportunity Commission has said the same. The ADA doesn’t limit the amount of leave an employer may need to provide, and enforcement officials and case law have said extension requests can be reasonable if the employee provides an end date. 

“However, indefinite leave — meaning that an employee cannot say whether or when she will be able to return to work at all — will constitute an undue hardship, and so does not have to be provided as a reasonable accommodation,” according to EEOC guidance.

Less stress

Similarly, “a job with less stress is generally not a reasonable accommodation,” Stern said.

Courts have ruled several times that the ADA doesn’t entitle an employee to a transfer to a less stressful manager or less stressful team, for example.

Notably, however, the Job Accommodation Network, a U.S. Department of Labor service, previously encouraged employers to dig into requests, saying stress associated with a disability or medical condition could fall under the ADA’s protection.

Bumping other employees

Finally, employers generally do not need to bump other employees from their jobs to comply with the ADA, Stern said.

The EEOC is clear on this issue as well: “You are not required to create a position or to bump another employee in order to create a vacancy,” according to agency guidance.

Employers should note, however, that if a position is open, “there are some people who take the position that you should consider putting someone in that open position [...] even if the person needing the accommodation is less qualified [than other candidates],” Stern said, referring to an ongoing split among the federal appeals courts about noncompetitive reassignment as a reasonable accommodation.