Restaurants must comply with all pay definitions and exemptions
Effective at the first of the year, the US Department of Labor has revised regulations within the wage and hour division that directly affect definitions of pay and applicable exemptions.
“The new overtime pay for exempt employees rate has been long debated and the increase by the Department of Labor (DOL) is a modest increase,” states National Restaurant Consultants CEO Richard Weil. So while the changes are not a surprise to any restaurant owner or employer, now businesses must prepare to execute. “The reminder for all operators is to make sure you are in full compliance as of January 1, 2020 relating to functions and duties of exempt staff and that your compensation meets the new thresholds.”
The updated regulations, which can be reviewed in this fact sheet, have been held in contention throughout this year’s wage debate; but restaurant owners should be aware, not only of the official changes listed here, but the fallout changes after the new regulations take affect.
“There is news that Illinois will be eliminating the tip credit, with Maryland and Virginia possibly following suit,” explains David Kincheloe, National Restaurant Consultants president, adding that, without a tip credit, even with increased wages, minimum-wage restaurant employees could end up losing money from their current earning levels.
Additionally, this will change expectations for new managers.
“It creates a problem for companies looking to promote from within as most shift leaders would be taking a pay cut to take an entry level manager position,” says NRC consultant Jared Flowers.
Restuarant owners and managers are advised to understand the full breadth of the changes, as well as how it will create internal and hiring changes within their restaurant and management structures. National Restaurant Consultants are kept abreast on all legistlative and regulatory changes and are experts in implementing new expectations within existing businesses. If you need assistance budgeting and structuring staff as these updates take hold, contact a restaurant consultant today.