DOL Issues Final Decision on Overtime Rule Updates

WASHINGTON – The Department of Labor (DOL) has issued a final regulation updating overtime regulations. This rule will significantly increase the overtime threshold to include all employees earning up to $58,656 per year. The rule will come into force in two stages: an increase in July this year and another increase in January 2025.

Sean Kennedy, executive vice president of public affairs for the National Restaurant Association, released the following statement about the change, stating: “This rule will exponentially increase operating costs for small restaurant owners who are desperately trying to maintain menu prices for their customers. And because the DOL created a one-size-fits-all rule based on national income data rather than regional data, this change will disproportionately impact restaurant owners in the South and Midwest.

“The Association and Restaurant Law Center has experienced significant growth after growing just four years ago. During this time, business conditions for restaurant operators have changed significantly. “It’s a shame that the DOL didn’t address our concerns, especially as they relate to regional disparities and the burden of automatic increases every three years.”

Other businesses and industry associations expressed concern, culminating in a lawsuit filed against the DOL on May 22 in the United States District Court for the Eastern District of Texas, Sherman Division.

The lawsuit, intentionally filed in a Texas court, cites an earlier case brought before the court regarding a 2016 DOL rule that sought to increase the minimum wage for overtime exemptions. The complaint says the court prevented the rule from being implemented and found the DOL’s attempt to automatically increase the salary threshold every three years to be unlawful.

“Plaintiffs are back in court because the department has done it again,” the complaint said. “In direct contravention of this court’s prior order, the Department issued another rule raising the minimum wage under the EAP waiver well above the level that the DOL may adopt, and again included an unlawful triennial ‘escalator’ provision.”

The organizations requested an expedited consideration of their complaint, given that the first phase of the new rule is scheduled for July 1, 2024, with full effects expected to be implemented on January 1, 2025.

The plaintiffs include the Plano Chamber of Commerce, American Hotel and Lodging Association, Associated Builders and Contractors, International Franchise Association, National Association of Convenience Stores, National Association of Home Builders, National Association of Wholesale Distributors, National Federation of Independent Business Inc., National Federation of Retailers, Restaurant Law Center , Texas Restaurant Association, Cooper General Contractors and Dase Blinds.