In April, the Department of Labor released a final rule that increased the salary threshold below which employees must be paid overtime when they work more than 40 hours in a week. The rule increased that threshold to $43,888 on July 1, and was set to increase that threshold again to $58,656 on Jan. 1. It also called for automatic increases every three years.
AHLA and other business groups challenged the rule in the U.S. District Court for the Eastern District of Texas, and last Friday, Nov. 15, Judge Sean D. Jordan issued a ruling that invalidated the Labor Department rule. AHLA will defend that ruling in court if the government seeks an appeal.
“AHLA applauds the court for recognizing the potentially devastating impact the Department of Labor’s overtime rule would have had on hoteliers, employees and guests," said AHLA President and CEO Rosanna Maietta. "AHLA and a broad-based coalition of business groups opposed this one-size-fits-all approach, which would have imposed an immediate cost increase at a time when small businesses are already struggling from increased costs. AHLA will continue to advocate for policies that help small business owners, encourage job creation, and promote upward mobility for workers.”
AHLA did not oppose the first increase that took effect in July, which was an appropriate adjustment to account for inflation. However, AHLA did oppose the increase set to take place in January and the automatic updates, which would have dramatically increased costs and made it much more difficult for small business hoteliers to operate their properties. The increase would have forced these small businesses to eliminate management positions that have traditionally been stepping-stones for people who find lifelong careers in the hotel industry.
As a result of the court’s ruling, the overtime salary threshold for most workers is now $35,568. The threshold for highly compensated workers is now $107,432.