As we head into 2025, there are some workplace policy updates that Connecticut employers should know. These changes to employment laws at the state and federal levels could substantially affect business decisions in the coming year and beyond. Following are brief descriptions of the most important changes and how they will affect employers across the Constitution State.

1. Connecticut’s Minimum Wage Will Increase

In September, Governor Ned Lamont announced that the state’s minimum wage would increase from the current $15.69 per hour to $16.35 per hour beginning the first of the year. Established by the legislation passed in 2019, the minimum wage is tied to changes in the federal employment cost index and will be adjusted annually.

Annual adjustments to the minimum wage must be announced by the Connecticut Department of Labor by October 15 each year and will take effect the following January 1. The increase taking effect January 1, 2025, represents a 4.2% increase in the employment cost index, resulting in a $0.66 hourly raise.

2. More Workers Will Be Eligible for Paid Sick Leave

Recent legislation, effective January 1, 2025, will expand the number of employers who are required to provide employees with paid sick leave. The new law will require employers with 25 to 49 employees to provide paid sick leave come January 1.

Under Public Act No. 24-8, employers must implement paid sick leave as follows:

• January 1, 2025 – Employers with 25 or more employees
• January 1, 2026 – Employers with 11 or more employees
• January 1, 2027 – Employers with 1 or more employees

For employees hired after the effective dates, paid sick leave will begin to accrue on an employee’s first date of employment. Except for seasonal workers and some temporary employees, virtually all employees are eligible for paid sick leave once the new year starts.

Paid sick leave will be accruing faster, with employees getting one hour of paid sick leave for every 30 hours worked (instead of one hour for every 40 hours worked) up to a maximum of 40 hours per year. The law also allows employees to use it to attend to a health condition affecting any family member, not just a child or spouse, and paid sick leave applies if the employer’s business or a family member’s school or care facility is closed due to a public health emergency.

Employers will have an alternative regarding unused accrued sick leave and won’t have to carry over any unused hours if they make available an employee’s annual paid sick leave as of January 1.

3. FTC Rule Banning Non-Compete Agreements Halted – at Least Temporarily

Back in April, the Federal Trade Commission (FTC) issued a final rule that banned the use of non-compete clauses in employment agreements. The new rule also made the vast majority of currently existing non-competes unenforceable. The rule was to become effective September 4, 2024.

However, in August, a Texas Federal District Court set the rule aside for all employers nationwide. The court found that the FTC did not have the authority to ban non-competes, and the outright ban was too broad and thus arbitrary and capricious.

The FTC has appealed the district court’s decision and a similar ruling by a district court in Florida. At least until further guidance is issued by the appellate courts, the FTC rule has no legal effect on non-compete restrictions.

4. Federal Overtime Rule Struck Down Nationwide

Another federal agency rule issued this year was also struck down by a district court in Texas recently. The Department of Labor (DOL) issued a final rule raising the salary minimums for exempt employees, creating overtime eligibility for a larger pool of non-exempt employees. Employers were left to increase salaries to keep employees exempt or pay overtime.

The first increase was effective July 1, 2024, and raised the standard salary level to $844 per week from the previous $684 per week set in 2019. On January 1, 2025, the standard salary was to increase to $1,128 per week. Updates were to take place every three years thereafter.

In November, a federal district court in Texas determined the DOL’s rule was unlawful because the agency had exceeded its authority by mandating the salary increases. The court’s ruling suspended enforcement of the DOL rule for all US employers.

The DOL has appealed the district court’s decision and has litigation regarding the rule pending in other federal district courts. For the time being, the DOL will be enforcing the 2019 salary standards for determining exempt and non-exempt employees.

Connecticut Employers Can Ensure Compliance by Consulting the Employment Lawyers at Wofsey Rosen

Employers across the state will need to update policies and practices to comply with the upcoming changes. If your company made changes to comply with federal overtime rules, you may need to re-evaluate some of those decisions since the new rules are not currently enforceable.

The employment law attorneys at Wofsey Rosen represent Connecticut employers in all types of employment-related matters. Established more than a century ago in Stamford, Wofsey Rosen is a law firm dedicated to professional excellence and client satisfaction. Make sure your workplace is up to date for 2025 by scheduling a consultation with us.