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National Restaurant Association - Overtime regs: What should you do now?

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Overtime regs: What should you do now?

After a federal court judge temporarily stayed the Department of Labor’s overtime rule changes, employers seeking more guidance found some in our Dec. 1 webinar on the issue.

On Nov. 22, Judge Amos Mazzant granted an emergency request to delay the Dec. 1, 2016, effective date for the new overtime rule. In his ruling, Mazzant declared that the plaintiffs -- in this case, 21 state attorneys general challenging the lawfulness of the DOL’s final overtime rule -- "demonstrated a substantial likelihood of success” on their case’s merits. He hasn’t ruled on the case itself but indicated he believes the DOL overstepped its authority. The court’s action stopped the rule nationwide. On Dec. 1, the DOL filed an appeal on his decision.

The DOL said it strongly disagreed with the court’s decision to put a hold on the regulation. “The Department’s Overtime Final Rule is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule,” it stated.

The National Restaurant Association webinar, moderated by Shannon Meade, the National Restaurant Association’s director of labor and workforce policy, and Angelo Amador, senior vice president and regulatory counsel, addressed what the decision means, whether the regulation is dead or not, and how restaurants should respond.

“The regulation is not dead yet,” Amador said. “The government filed quickly to appeal the preliminary injunction, and we’ll see where that leads. However, litigation does not always move fast and we have a new President and Administration coming in on Jan. 20. That could change things significantly.”

Amador said the court of appeals could do several things – from upholding the stay to making the regulations effective as of Dec. 1, meaning they would be retroactive. But he said he didn’t think the latter would happen. He also said that if the court does not decide on the preliminary injunction appeal by Jan. 21, a new Secretary of Labor would then decide whether to pursue the appeal.

Mazzant must still rule on a motion for summary judgement in a second case filed by more than 50 business groups. They also argue the DOL exceeded its delegation of authority. That case was combined with the one in which the temporary stay was issued. The plaintiffs are awaiting the judge’s decision.

Meade said that even though restaurateurs were no longer required to comply with the rule changes by Dec. 1, a number have already reclassified positions and are moving forward with their plans. Others are still struggling and putting theirs on hold. She offered three takeaways for restaurateurs:

  1. Make sure you comply on the state level. All of this has been happening on the federal level, but it’s important to check state law for any overtime provisions. You must comply where you operate your businesses. Meade points out that federal law is a floor and employers must follow whichever regulations are most beneficial to employees.
  2. Communicate with your employees about the latest information. Keeping them informed and updated on changes is critical.
  3. Stay focused on the outcome. The judge’s decision to put a hold on the rule was not a final one. Watch and wait for more information going forward.

For the latest information on the overtime rule, visit Restaurant.org/Overtime, which includes the Dec. 1 webinar.

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