Worker Rights: Points Of Light In Troubled Biden Administration

The Federal Trade Commission Tuesday banned noncompete agreements in employment contracts, and the U.S. Dept. of Labor announced a new rule expanding overtime eligibility for "white collar" workers.

Photo by Srinivasan Venkataraman on Unsplash

Millions of American workers hit the jackpot on Tuesday.

First, the Federal Trade Commission (FTC) ended restrictive noncompete clauses in the employment contracts of an estimated 30 million workers.

Then the U.S. Department of Labor (DOL) announced a final rule that extends overtime protection to millions of lower paid salaried workers who currently are forced to work 40+ hours per week without extra pay.

As Pres. Biden sinks in public opinion polls due to a confluence of economic woes, unpopular wars and mass illegal immigration, his administration obviously is betting that its worker rights initiatives will impress voters.

“We’re putting more money in the pockets of millions of American workers because you earned it,” said Pres. Biden in a video message posted on X (formerly Twitter).

Overtime Pay

The DOL rule extends overtime protection to millions of low paid salaried workers forced to work 40+ hours per week without extra pay.

Currently, workers who are paid $35,568 or more are not eligible for overtime. Effective July 1, 2024, the salary threshold for overtime pay will rise to $43,888 and on Jan. 1, 2025 it will increase to $58,656. Workers who make less than the threshold are eligible for overtime.

Noncompetes

Noncompetes arose to protect employer trade secrets and prevent the theft of company property. They evolved into an exploitative tool for employers, enforced by courts, to suppress workers’ wages and thwart competition.

Real examples from among 26,000 public comments submitted to the FTC:

• A salesman in an asphalt company in Michigan couldn’t start his own business because of a non-compete.

• After a bartender was sexually harassed and emotionally abused, she took a new and better paying job. She was sued for $30,000 for violating a non-compete that she didn’t even know she had signed.

• A physician in Appalachia felt trapped in a poor employment situation after a hospital merger. He feared significant burnout and forced retirement because he effectively could not quit due to a non-compete.

The FTC’s new rule bans noncompete agreements in future employment contracts and makes existing noncompetes unenforceable for all but senior executives (who represent just 0.75% of workers). Henceforth, employers are prohibited from entering into or enforcing new noncompetes with senior executives (workers earning more than $151,164 per year).