THLA Joins Lawsuit to Block New Overtime Rule

This month, Texas Hotel & Lodging Association joined more than 55 other business groups as a named plaintiff in a lawsuit against the U.S. Department of Labor (DOL) to prevent the new overtime regulation from taking effect on December 1st. 

Members will remember that in May, THLA sent out alerts regarding the new DOL overtime rule changes, and we hosted a webinar on the topic in June. 

The new DOL regulation increases the minimum salary threshold for overtime exemptions from $23,660 annually to $47,476 annually.  This means that for a lodging property to lawfully characterize an employee as exempt from overtime, that employee will likely have to earn an annual salary of at least $47,476. 

The new overtime rules are scheduled to become effective on December 1, 2016.  

The lawsuit, filed in U.S. District Court for the Eastern District of Texas, asks a federal judge to set aside the new overtime salary requirement because the new rule causes  economic harm to both Texas employers and employees.  The legal strategy includes seeking an injunction to prevent the DOL rule from taking effect on December 1st, and delaying implementation of the new rule until the Court fully determines the matter. 

Additionally, THLA met with the Texas Attorney General’s litigation staff regarding the new regulations in early September, and we formally requested that the AG take action against the DOL. 

We are pleased that the Texas Attorney General agreed, filing his own lawsuit against the DOL last week.

Separately from the lawsuits, THLA urged  the Texas delegation to Congress to vote for H.R. 6094, which would delay implementation of the new overtime rule until June 1, 2017.  We expect the U.S. House of Representatives to vote on this bill in the coming days.  If it passes the House, the H.R. 6094 will head over to the Senate for adoption.

Despite our efforts to restrict the implementation of the new overtime regulations, hoteliers should plan for salary basis increases to take effect  on December 1, 2016. 

The outcome of the lawsuits is uncertain, and any bill passed by Congress will likely face a presidential veto threat.  THLA will keep you up to date on the progress of all these efforts.

If you have any questions about how the new overtime rule would affect your operation, do not hesitate to contact a THLA attorney