New Proposal Would Redefine Who Gets Overtime
On June 30, the Labor Department released a 295-page proposed revision to federal overtime laws that greatly increases the salary level that dictates which employees must be paid overtime. Under the proposed revisions, the threshold would increase from the current $23,660, or $455 a week, to $50,440, or $970 a week. This means most salaried employees earning below $50,440 a year would be eligible for overtime pay if they work more than 40 hours in a week. The DOL has proposed automatically adjusting the threshold after that, according to inflation or wage growth. About 5 million individuals would become eligible for overtime pay under the proposed revisions, according to the White House. "While we are still reviewing the Department of Labor's proposed overtime regulations, at first sign, it seems as if these proposed rules have the potential to radically change industry standards and negatively impact our workforce," said Angelo Amador, National Restaurant Association (NRA) senior vice president of labor and workforce policy and regulatory counsel. "Supporters of these regulations say they want to increase Americans' take-home pay, but these sweeping changes to the rules could mean anything but." Overtime rules are a critical issue for the restaurant industry. The NRA has been closely engaged on this issue for more than a year, working with Congress and federal agencies to discuss the restaurant workforce and the impact of widespread changes on the industry's businesses and employees. NRA research shows that more than 80 percent of restaurant owners and 97 percent of restaurant managers start their careers in non-managerial positions and move up, often with performance-based incentives. President Obama ordered the DOL to make the revisions more than a year ago and has made it one of his priorities. The revisions are expected to be published in the Federal Register within the next few days, and a 60-day comment period will follow. The White House indicated that final regulations are expected in 2016. The NRA will be submitting comments, and will continue to play a leading role in shaping regulations that work for the restaurant industry.