Challenging the New Overtime Rule: AHLA’s Response to Regulatory Pressures in Hospitality

In a firm stance against the new overtime threshold set by the Department of Labor, Kevin Carey, serving as the Interim President & CEO of the American Hotel & Lodging Association (AHLA), has issued a compelling statement.

Highlighting the implications of the Department of Labor’s final overtime rule, Carey emphasized its potential negative impacts on the hospitality industry. The rule mandates overtime pay for employees working beyond 40 hours a week, significantly raising the minimum salary threshold.

Carey expressed deep concerns about the regulatory burden imposed on hoteliers, foreseeing job losses and hindrances to career progression within the industry. He warned of potential job cuts, particularly in managerial positions crucial for career advancement.

The proposed overtime rule targets salaried executive, administrative, and professional workers exempt from overtime pay, aiming to elevate their salary threshold under the Fair Labor Standards Act.

This rule forms part of a broader federal initiative complicating compliance for hoteliers, encompassing regulations regarding joint employment and independent contractor status.

Set to be enforced starting July 1, 2024, the new overtime rule will initially raise the salary threshold to $43,888, further increasing to $58,656 by January 1, 2025. The adjustment methodology involves both current and new approaches based on weekly earnings percentile.

This development follows a significant rise in the minimum salary threshold just four years ago, indicating a continuous trend of regulatory changes impacting the hospitality sector.

The American Hotel & Lodging Association (AHLA) is actively leading coalition efforts alongside the Partnership to Protect Workplace Opportunity, advocating against the DOL rule. Their collective actions include industry-wide advocacy to Congress for legislative intervention.