The U.S. District Court in the Eastern District of Texas has overturned the 2024 changes to overtime regulations proposed by the U.S. Department of Labor (DOL). This decision marks a victory for a coalition of business groups, including the Restaurant Law Center and the Texas Restaurant Association, who opposed the rule.

The contested regulation aimed to raise the overtime threshold to encompass all employees earning up to $58,656 annually, with provisions for automatic future increases. Business organizations argued that such changes would impose significant financial burdens on employers.

Michelle Korsmo, President & CEO of the National Restaurant Association, commented on the ruling: “Today’s decision is a win for restaurant operators and their business viability. During the past five years, the average operator’s labor costs have gone up more than 30 percent. The challenge to recruit talented managers is already pushing salaries higher, ensuring that good employees are making more through increases happening in the marketplace, in a more manageable manner for operators."

Korsmo further expressed satisfaction with the court's decision: “We’re pleased the court agreed with our concerns about how the DOL’s one-size-fits all rule was an unlawful exercise of the agency’s power that would have significantly driven up costs for business owners and consumers.”

Further details on these arguments can be found through resources provided by the Restaurant Law Center.