Overtime Rule Halted: Major Victory for Hotels


Overtime Rule Halted

In a major legal victory announced in the 11th hour, the Eastern District Court of Texas granted an emergency injunction on the Department of Labor’s overtime regulation. The preliminary injunction prohibits the new overtime rules from going into effect on December 1st.

It is expected that the Department of Labor will appeal this decision, but while that is being heard, the new regulations are prohibited and cannot go into effect.

The court said that the plaintiffs, in this case, filed by 21 state attorneys general including Alan Wilson of SC, “demonstrated a substantial likelihood of success” on their case’s merits regarding the unlawfulness of the DOL’s final rule. The court’s action stops the rule nationwide.

The American Hotel and Lodging Association joined forces with more than 50 other national and state associations to file a similar lawsuit against the DOL and its overtime regulation. The National Restaurant Association also worked to encourage Congress to make changes to the rule.

Overtime rule too much, too soon for hotels

The hospitality industry argued the rule is too much, too soon and it will have a far-reaching negative impact on the millions of workers in our nation’s restaurants and hotels.

These new regulations would have, among other things, increased the salary requirement for supervisors and managers from $455 per week up to $913 per week. Such a change would have had a disproportionate impact on jobs in the hospitality industry.
While this is a positive step forward, this decision does not delay the overtime rule indefinitely. Additional legal actions or a final decision by the Court in favor of the DOL could result in the overtime rule taking effect. Therefore, the SCRLA once again reminds our members that it is important to continue to take the necessary steps to be ready to comply.

According to attorney T. Chase Samples with Jackson Lewis P.C. in Greenville, the real challenge with this ruling is how to deal with it from a business perspective and an employee relations perspective. Many employers have planned ahead for this regulatory change and have already notified employees of changes in pay. It is going to be difficult from an employee relations’ perspective to un-ring the bell, especially for those that were expecting a pay raise.

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Source: South Carolina Restaurant & Lodging Association

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