Santa Clara, CA: An employee at Chipotle Mexican Grill has filed an unpaid overtime law class action lawsuit after the restaurant chain reversed its decision in 2016 to pay workers overtime.
The Chipotle decision also flies in the face of the new federal regulation enacted in 2016, in which the Labor Department updated the federal salary threshold for overtime eligibility for the first time in 12 years, from $23,660 to $47,476. It made 4.2 million workers newly eligible for overtime pay.
Carmen Alvarez, 55, has worked for Chipotle in New Jersey since 2013. The fast food company reversed its decision to pay her and her fellow workers overtime following a recent court decision that temporarily halted the US Department of Labor from enforcing the regulation, according to Alvarez’ lawsuit. The complaint was filed in the US District Court of New Jersey.
The new overtime regulation is being contested before an appeals court by 21 states and a coalition of business groups. They argue the Labor Department’s enforcement of the rule would be harmful to their profitability. According to the Chipotle unpaid overtime class action, the Department of Labor overtime regulation remains in effect, despite the injunction, and companies that decided not to comply are in violation of federal labor laws.
Millions of Americans are currently working without overtime pay despite working long hours. The lawsuit claims that while business are waiting to see what the outcome will be in the courts, they are legally obliged to comply with the overtime rule, unless the appeals court overturns it and the ruling applies only to certain state government employees.
According to one attorney, companies that did not comply with the overtime rule could have made a mistake, as the preliminary injunction stops only the parties before the court, and in this case that would be the Department of Labor. The injunction does not stop the right for private sector employees to sue for unpaid overtime and wages under the new regulation.
