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ALERT: TX Federal Judge Halts Overtime Rule

On Tuesday November 22, a judge in Texas ruled that the federal Department of Labor's new Overtime Rule--that raised the salary threshold under which workers would be eligible for overtime pay from $23,660 annually to $47,476--should be halted in its implementation.

According to the National Club Association,

"The ruling means that the rule WILL NOT go into effect on December 1, 2016 and that all clubs may keep their employees at their current salary and schedule without the concern of additional payroll expense."

What does this mean for your club--especially if you were planning ahead in order to be ready for the December 1st start date? The NCA recommends that you inform your employees as follows:

"Because of the decision by a federal court, employee pay and work schedules will remain in effect as they were at the beginning of the year until this case is resolved."

You should know that the Department of Labor has the right to appeal this decision with 60 days; however, most experts agree that the chance of a successful appeal is slim. Keep in mind, though, that that does not guarantee a hold on all possible changes. There may be some change in the minimum weekly salary threshold proposed in 2017. As such, club leaders and managers should be prepared for additional compensation discussions with their staff if that happens.

If you've already implemented these changes or had extensive conversations with your staff about it, be aware that suddenly rolling back on these expected raises may foster resentment. Think carefully about the impact on morale, especially right before the holidays.

The Nation's Restaurant News reports that many restaurants across the country had already executed this initiative well in advance of December 1, and some are considering simply moving forward as-is.

"“You put an expectation in employees’ heads that they’re going to get a raise, and if you don’t follow through on that, you’ll be creating a lot of animosity,” said Glenn Grindlinger, a partner and labor and employment specialist at Fox Rothschild LLP."

To learn more about the history of the Overtime Rule and speculation for the future, check out this article by the Nation's Restaurant News.

The NCA also invites you to contact them directly if you have further questions as to how this will affect you:

Contact NCA’s Vice President of Government Relations and General Counsel

Brad Steele at 202-822-9822 or at

Reid Consulting Services, the creators of Food & Beverage Service Boot Camp(TM), specialize in operations consulting, strategic planning, food and beverage management, and training programs for private clubs around the world. For more information, phone (623) 322-0773; or visit the RCS website at

#news #HR #humanresources #staffmanagement #clubmanagement #laws

Whitney Reid Pennell
 Founder & President

Whitney Reid Pennell is the founder and president of the award-winning RCS Hospitality Group (formerly Reid Consulting Services). She is a published author and widely praised seminar leader, with over 20 years of club operations management and consulting experience. 

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