By Ronnie Miles, NGCOA, Senior Director of Advocacy
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A federal court has struck down the Biden administration’s new overtime rule, a significant development that directly impacts labor costs for golf course owners and operators. The rule, which aimed to expand overtime pay eligibility to approximately 4 million additional workers, has been invalidated, reverting overtime salary thresholds to their previous levels.
The new Overtime Rule, effective July 1, 2024, increased the salary threshold for overtime pay eligibility from $35,568 to $43,888 annually, with a further increase to $58,656 planned for January 1, 2025. Its goal was to ensure that salaried employees earning below these thresholds received overtime pay for work exceeding 40 hours per week. However, a legal challenge led by the state of Texas and several business groups argued that the Department of Labor (DOL) overstepped its authority by focusing on salary levels rather than job duties to determine overtime eligibility.
U.S. District Judge Sean Jordan in Texas ruled that the regulation conflicted with the Fair Labor Standards Act (FLSA), which emphasizes job duties over salary. As a result, the salary threshold for overtime pay eligibility remains at $35,568, set in 2019. “The Department’s changes to the minimum salary level in the 2024 Rule exceed its statutory jurisdiction,” Jordan wrote.
For golf course owners and operators, this decision is pivotal. The blocked rule would have increased payroll costs for a wide range of employees, from golf professionals, F&B staff, maintenance and administrative personnel. The ruling provides financial predictability by maintaining the existing threshold, allowing golf courses to plan budgets and staffing without the looming burden of higher overtime liabilities.
Golf course owners may wish to proceed with caution, DOL may appeal the decision, and changes to overtime regulations remain a hot topic in labor policy. With a new change in administration in January, this decision will likely stand. Golf course owners and operators should closely monitor developments to ensure compliance and proactively manage labor costs. Consult with legal counsel to navigate this evolving regulatory landscape.
If you have questions concerning this court decision or any other golf-related issue, email Ronnie Miles at rmiles@ngcoa.org.
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