Last week an injunction was issued by a federal judge in Texas to temporarily postpone the new overtime regulations that were scheduled to go into effect on December 1st. The federal judge is expect to challenge the requirement that would go to the United States Court of Appeals to make a decision on.
The new overtime regulations that were originally scheduled to go in effect December 1st mandated that business owners must provide overtime pay to salaried employees who earn less than $913 per week or $47,476 per year. The new regulations would have also built in automatic increase to the overtime salary levels every three years. This would have been a substantial increase from the Department of Labor’s previous thresholds of paying overtime to salaries employees who earned less than $455 per week or $23,660 annually.
Approximately over 4 million Americans would have seen an increase in their pay. The regulations were expected to have a great impact on restaurant owners with managers or assistant managers as well as hotel owners with department managers who are commonly paid a salary and work overtime on a regular basis.
While this may be a big sigh of relief for restaurant and hotel owners in the short term, there is still a possibility that the overtime regulations could come back onto the table sometime in the future. This could mean that a restaurant or hotel owner could still be responsible for paying overtime to certain salaried employees in the future. The time table for when a final ruling will be made on if and when the overtime regulations will be implemented, restaurant and hotel budgets for 2017 and future years should take this into consideration.
Aronson will continue to monitor the status of the overtime regulations as this will impact a high volume of the restaurant, hotel, and other hospitality clients that we serve. Please reach out to us if you have any questions or would like more information on the overtime regulations and the impact it can have for a restaurant or hotel.
For further questions, contact Aaron Boker.