How US changes to ‘noncompete’ agreements and overtime pay could affect workers

NEW YORK (AP) — For millions of American workers, the federal government took two actions this week that could bestow potentially far-reaching benefits.

In one move, the Federal Trade Commission voted to ban noncompete agreements, which bar millions of workers from leaving their employers to join a competitor or start a rival business for a specific period of time. The FTC’s move, which is already being challenged in court, would mean that such employees could apply for jobs they weren’t previously eligible to seek.

In a second move, the Biden administration finalized a rule that will make millions more salaried workers eligible for overtime pay. The rule significantly raises the salary level that workers could earn and still qualify for overtime.

The new rules don’t take effect immediately. And they won’t benefit everyone. So what exactly would these rules mean for America’s workers?

WHAT IS A NONCOMPETE AGREEMENT?

Noncompete agreements, which employers have deployed with greater frequency in recent years, limit an employee’s ability to jump ship for a rival company or start a competing business for a stated period of time. The idea is to prevent employees from taking a company’s trade secrets, job leads or sales relationships to a direct competitor, who could immediately capitalize on them.

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