Workplace Governance

SHRM advocates for policies that create a thriving labor market where individuals and organizations both benefit. SHRM supports allowing parties to consent to well-structured noncompete agreements that are reasonably and appropriately tailored. It is SHRM’s position that overly restrictive policies can stifle innovation, limit training opportunities, and create unintended consequences for businesses and workers alike. We urge lawmakers to consider alternatives that balance worker mobility with business needs.

SHRM has engaged on this issue at both the federal and state levels, offering employer perspectives on proposed noncompete policies and advocating for alternatives that balance workforce mobility with business needs. In response to the Federal Trade Commission’s attempt at near-total ban, SHRM submitted a public comment and multiple amicus briefs urging a more balanced approach. On August 20, 2024, the rule was vacated and following a change in administration, the appeal was dismissed. SHRM continues to monitor federal activity and will engage as this issue evolves. 

In New York, SHRM continues to work with policymakers to ensure any new requirements protect workers, preserve employer competitiveness, and reflect evolving labor market realities.

SHRM opposes federal or state regulations that predetermine an employment relationship where neither party intends one. The assumption that all workers should be classified as employees is outdated and overlooks the fact that many individuals prefer independent contractor status for its flexibility and autonomy. SHRM supports a uniform, statutory definition of “employee” to ensure clear, consistent distinctions between employees and independent contractors under statutes such as the FLSA and National Labor Relations Act (NLRA).

Federally, in the absence of clear statutory definitions, agencies — including the U.S. Department of Labor’s Wage and Hour Division (WHD) and the National Labor Relations Board (NLRB) — have published regulatory guidance that has shifted significantly across administrations. As outlined in the written testimony of Paige Boughan, MS, SHRM-SCP and in a follow-up letter to the House Workforce Protections Subcommittee, WHD worker classification rules have been repeatedly proposed, delayed, withdrawn, reinstated, and replaced between 2020 and 2025, resulting in ongoing litigation and persistent legal uncertainty.

As noted in SHRM’s Senate Request for Information, some employers may limit training or benefits for independent workers to mitigate misclassification risk — an outcome that harms both workers and businesses. At the state level, SHRM has engaged with New Jersey policymakers and raised concerns that proposed regulations would create an unworkable framework that effectively presumes employee status, contrary to legislative intent, established case law, and sound public policy.

SHRM supports reasonable updates to the FLSA overtime exemption categories, including the “white-collar” executive, administrative, and professional (EAP) exemptions, as well as the computer and outside sales exemptions. A clear understanding of who is — and who is not—exempt from overtime is imperative for workforce planning, organizational structure, and other long-term business considerations. However, SHRM research found that fewer than one in three HR professionals (30%) report that the regulations defining overtime exemption status are easy to understand. 

SHRM supports regular, reasonable, and data-driven updates to the salary threshold that follow a notice-and-comment process, incorporate analysis of worker earnings and broader economic trends, and provide employers with a sufficient compliance window. Beyond salary, SHRM also encourages the WHD to evaluate how technological advancements have affected certain exemption classifications, including computer and outside sales employees.

Following the September 23, 2023, publication of WHD’s proposed rule to increase the overtime salary threshold, SHRM — along with 27 state chapter affiliates—submitted a public comment expressing support for reasonable increases. After publication of the final rule, SHRM closely monitored legal challenges to the 2024 overtime rule and will continue to track developments and provide resources to support employer compliance.

SHRM supports a statutory definition of “joint employer” that provides a clear, uniform framework to guide businesses and employees in complying with applicable laws and regulations. SHRM does not support overly broad regulations that create a joint employer relationship through “indirect or reserved” control over a third party. Any legislative solution should rely on well-established common law factors and require sufficient evidence of regular and continuous control — not sporadic, isolated, or de minimis actions.

A joint employer relationship arises when multiple entities exercise enough control over a worker to establish an employment relationship. This status triggers rights and obligations under laws such as the FLSA, Title VII of the Civil Rights Act, and the NLRA, and has been a subject of ongoing interest and guidance by regulatory agencies like the NLRB. Understanding joint employment is central to effective human resource management. 

In today’s evolving domestic and global economies, businesses require flexible practices to attract and retain talent and remain competitive. Clear and consistent standards are essential for employers to structure service arrangements predictably, reducing litigation, confusion, and ambiguity for both workers and employers. SHRM will continue to advocate for standards that are clear, consistent, and reflective of the intentionality of co-employers, providing employers and HR professionals the guidance necessary to navigate workforce relationships confidently.

SHRM believes a one-size-fits-all approach cannot account for the diversity of workplaces, industries, and organizational needs. Rather than rigid mandates, SHRM advocates for solutions that empower employers and employees to collaborate on policies that foster innovation, productivity, and work/life integration. Through open communication and mutual respect, workplaces can adapt to evolving needs without compromising operational efficiency or employee engagement.

Workplace laws and regulations must be fair, balanced, and reasonably applied to provide certainty and stability for organizations and employees alike. Such an approach preserves employees’ rights while clear legal obligations reduce the risk of ambiguous or overly expansive enforcement actions, helping companies maintain compliance with confidence.

SHRM supports its membership of HR professionals and business leaders who operate at the intersection of work, workers, and the workplace, shaping policies that directly impact day-to-day operations. SHRM has advocated on a range of workplace proposals addressing issues such as benefits design, scheduling, and internal communication. SHRM closely monitors legislative proposals related to workplace structure and flexibility — including bans on mandatory meetings, standardized 32-hour workweeks, and “right to disconnect” policies. While these initiatives aim to enhance employee well-being, they can introduce vague requirements that create compliance uncertainty or duplicate existing federal and state laws.