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DOL Overtime Changes

Thursday, May 26, 2016   (0 Comments)
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White House Unveils Overtime Changes


The National Restaurant Association will hold a complimentary webinar on the Overtime Rule on Thursday, May 26, at 3 p.m. Eastern. There is no cost to attend this webinar, however, registration is required, which can be done by clicking here. Below is a brief summary of the final rule.  4.2 million salaried workers will be affected by this rule based on their salaries.  Make sure you are prepared for changes that could impact your operation.


Summary of the Final Rule

The final rule is 508 pages long. The restaurant industry is mentioned 39 times and the National Restaurant Association’s comments are cited 22 times. Kudos to all of you who went through our portal to submit comments, as the final rule highlights that “the National Restaurant Association submitted 2,648 comments.” For those of you not wishing to read 508 pages of exhilarating regulatory language, the government provided a 3-page overview. We can summarize it further to these four bullets: 

  • It guarantees time-and-half pay to any salaried employee earning under $47,476 a year ($913 a week) and who works more than 40 hours in a week.
  • Automatically updates the salary threshold every three years, tying it to the 40th percentile of full-time salaried workers in the lowest-income Census region. The first update would be Jan. 1, 2020. Furthermore, the DOL projects a salary threshold of $51,000 by Jan. 1, 2020.
  • Makes no changes in the duties tests used to determine whether a salaried employee above the threshold is considered exempt from overtime pay.
  • For the first time, it allows certain bonuses and incentive payments to count toward up to 10 percent of the new salary level, if the payments are made on at least a quarterly basis.

Engagement with the National Restaurant Association

I would like to again thank the thousands of you who engaged through the National Restaurant Association by using our “Take Action” page, attending our Public Affairs Conference, or by other means.  As mentioned, the Administration highlighted that the Association submitted 2,648 comments. 

Two clear examples of our influence in the Overtime Rule are highlighted in the sections dealing with the “long” duties test and the bonuses. On the “long” duties test, the Rule states that the “Department understands the concerns of employers and their advocates that prohibiting managers from ‘pitching-in’ could negatively affect the workplace. For example, NRA stated that ‘Performing hands-on work at the manager’s own discretion to ensure that operations are successfully run in no way compromises the fact that the manager’s primary responsibility is performing exempt work.’” As to allowing bonuses, the Rule states that “Commenters representing employers offered a range of reasons for generally supporting the inclusion of nondiscretionary bonuses and incentive payments…the NRA agreed that such payments are a key part of exempt employees’ compensation in its industry.” 


Your membership in the Kansas Restaurant & Hospitality Association includes dual membership in the National Restaurant Association.  Thank you to the NRA for providing updates on federal regulatory changes.

Combining forces to empower a thriving hospitality industry in Kansas!


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