The National Restaurant Association issued the following statement regarding the Department of Labor’s overhaul of current overtime regulations:
“We are appreciative that it appears the Department of Labor listened to restaurants’ concerns and did not include the burdensome ‘long’ duties test, which would have led to increased contentious disputes and litigation—something the Department itself stated it wanted to avoid with these current regulations,” says Angelo Amador, senior vice president of labor and workforce policy and regulatory counsel. “However, the threshold for exempt employees in the final regulations is still too high.
“Restaurants operate on thin margins with low profits per employee and little room to absorb added costs. More than doubling the current minimum salary threshold for exempt employees, while automatically increasing salary levels, will harm restaurants and the employer community at large.
“More than 80 percent of restaurant owners and 97 percent of restaurant managers start their careers in non-managerial positions and move up with performance-based incentives. These regulations may mean that salaried employees, who have worked hard to get where they are, could be subject to becoming hourly employees once again.”
It was announced on Tuesday that President Barack Obama’s administration was moving to finalize changes to increase the salary threshold of workers entitled to overtime wages. The Department of Labor is set to extend overtime to an estimated 4.2 million additional workers who are not currently eligible under federal law. This move is expected to increase wages for workers by $12 billion over the next decade.
The final rule, which doubles the salary threshold from $23,660 to $47,476 per year, will take effect December 1. Most salaried workers will be guaranteed overtime. The new level will also be automatically updated every three years.