DOL Sets Overtime Rules Affecting the Restaurant Industry
Whether you own a fast food restaurant or a fine dining establishment, you must now pay your salaried workers overtime if they meet new qualifications set by the Department of Labor (DOL).
This means fast food restaurant managers, head cooks, sous chefs, pastry chefs and sommeliers working a salaried job that pays $47,476 or less, now qualify for overtime pay. They receive time and a half for hours that exceed 40 a week. The exemptions for salaried employees have new limits and regardless of whether the employee is hourly or salaried, overtime rules apply.
How Does the New DOL Overtime Rule Compare with Past Rules?
The DOL released the new rule in May 2016. The limit on salaried workers who could collect overtime had stayed at $23,660 since 2004. Here are some relevant facts for owners in the restaurant industry:
- Average wages in the U.S. for chefs, head cooks and pastry chefs are $45,920
- Bakers’ wages average is around $26,270
- Culinary Journalists’ mean wage is $46,560
- The majority of these employees work 50 or more hours per week
(Information from Eatery.com)
Most Common Ways for Employers to Deal with the New Law
To continue to cover costs and also deal with additional overtime pay, employers will most likely do one or more of the following:
- Pay higher salaries
- Cut work hours to no more than 40 per week
- Raise menu prices
When Does the Overtime Rule Go into Effect?
The rule goes into effect December 1, 2016. Every three years, beginning in 2020 the DOL will modify the overtime threshold to match the 40th percentile income of the country’s lowest income area, which is the Southeast.
Stay on Top of Changing Laws as an Employer
At Stephen Hans & Associates, our firm helps small and middle sized business owners deal with legal changes. We understand how difficult it is to stay apprised of new laws while managing in the daily demands of running a restaurant.
We do not just keep you informed. We also provide legal guidance and representation to help you protect your rights and assist you with policies that avoid liability.