AHLA member to Congress: DOL rule will hurt hotel employees, small business owners

Jagruti Panwala

WASHINGTON (Nov. 28, 2023) – Tomorrow at 10:15 a.m. ET in room 2175 of the Rayburn House Office Building, American Hotel & Lodging Association Board Member and Principal of Sita Ram LLC Jagruti Panwala will testify before Congress in opposition to the Department of Labor’s (DOL) proposal to raise the overtime salary exemption threshold for executive, administrative, and professional employees under the Fair Labor Standards Act.

DOL in August proposed raising the threshold from $35,568 to an estimated $60,209 in 2024 according to the department’s own projections, a nearly 70% increase, meaning that all employees making under that amount must be paid overtime for any hours worked over 40 in one week. Additionally, the DOL proposal would automatically increase the threshold every three years thereafter by tying it to the 35th percentile of earnings for full-time salaried workers in the lowest-wage Census Region (currently the South).

In her testimony tomorrow before the House Committee on Education & the Workforce Subcommittee on Workforce Protections, Ms. Panwala will highlight how such an extreme change would exacerbate the economic difficulties facing hoteliers, including labor shortages and supply chain problems.

“The Department’s overtime proposed rule will have serious consequences for my business as well as my employees. It is critical to note that the proposal does not simply increase salaries for a few employees at a marginal level. Rather, an up to 70% increase will drastically impact the entire business plan well beyond compensation,” Ms. Panwala said in her prepared remarks.

“The last thing small business owners want to do is lay off employees. Unfortunately, some hotels may be forced to do so because of this new rule in order to stay in business,” she added.

"We applaud Committee Chairwoman Virginia Foxx and Subcommittee Chairman Kevin Kiley for inviting AHLA to testify on this extraordinarily harmful DOL proposal,” said American Hotel & Lodging Association President & CEO Chip Rogers. “Yet another increase to the overtime threshold would create negative economic impacts for hotel workers and employers alike. We cannot afford a massively disruptive change, particularly at a time when we’re finally starting to put the economic devastation of the pandemic behind us.”

The DOL proposal comes after the department increased the minimum salary threshold four years ago by 50.3% to $35,568.

View the testimony and watch the hearing via livestream tomorrow at 10:15 a.m. ET here.