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Greater Louisville Inc. The Metro Chamber of Commerce
× Greater Louisville Inc. The Metro Chamber of Commerce

Media Center

May 21, 2024 11:25am

Federal regulatory hurdles and their impact on businesses

Recent changes to key business regulation policies at the federal level have introduced challenges for companies, complicating operations and imposing financial burdens. The recent rules handed down by the Federal Trade Commission (FTC), Department of Labor (DOL), and Equal Employment Opportunity Commission (EEOC) will drastically impact the business community landscape and stifle the economic growth seen in recent years. These rules reshape the regulatory landscape and will have profound implications for businesses across Greater Louisville. Navigating these regulatory hurdles will require careful strategizing and resource allocation. As the voice of the Greater Louisville business community at all levels of government, GLI will continue to pursue pro-business policies at the federal level and keep you apprised of any revisions to these rules in the future. 

FTC Noncompete Rule 

The updated FTC noncompete rule published on April 23, 2024, aims to increase competition, and protect workers’ rights by restricting the use of noncompete agreements, thereby allowing employees greater mobility in the job market. This crackdown on noncompete agreements has sowed seeds of uncertainty within the business landscape. While aimed at protecting employee mobility, the rule has left businesses grappling with the dilemma of safeguarding proprietary information versus retaining top talent. These limitations undermine companies’ ability to prevent competitors from poaching skilled workers, eroding their competitive edge, and stifling innovation. Navigating the complex legal landscape surrounding noncompete agreements incurs significant legal expenses, diverting resources from core business activities and hindering growth. This rule is scheduled to take effect August 21, 2024. Any business that utilizes noncompete agreements should consult legal counsel on how this rule may impact their business practices moving forward. 

 A number of employer coalitions, including the US Chamber of Commerce, have filed suits to halt this rule’s implementation. GLI was proud to sign letters of support for these lawsuits and will continue to monitor their progress on behalf of the Louisville business community. 

DOL Overtime Rule 

The DOL’s overtime rule change, released on April 23, 2024, aims to strengthen protections for workers by expanding eligibility for overtime pay. This rule increases the salary threshold established in the Fair Labor Standards Act, expanding the number of employees eligible to receive overtime compensation. This drastic change has triggered a wave of concerns among businesses, particularly small enterprises. By expanding eligibility for overtime pay, the rule strains already tight profit margins, and exacerbates financial concerns for businesses. The increased labor costs associated with overtime pay impede expansion efforts and hiring initiatives, curtailing job creation, and hindering economic progress. The administrative burden of tracking hours and adjusting payroll systems adds layers of complexity to business operations, will impede efficiency and productivity. GLI is strongly opposed to this change by the Department of Labor. 

 

EEOC Harassment Rule 

The recent change to the EEOC harassment rule seeks to enhance protections against workplace harassment by providing clearer guidelines and expanding the scope of behaviors considered unlawful, thereby promoting a safer and more inclusive work environment for all employees. This rule, released on April 29, 2024 has fortified regulations to combat misconduct and comes amid heightened awareness of workplace harassment. Employers will be mandated to implement harassment prevention measures that align with the most recent additions to classifications of protected classes including though not limited to, sex, pregnancy, race, and religion. Compliance will necessitate ongoing vigilance and proactive intervention, to evolving societal norms and legal standards.