In his first week at the White House Donald Trump promised business leaders he would slash 75% of regulations. Since then, the restaurant industry has been waiting with bated breath to see how guidances like the overtime rule and joint employer would shake out. At this year’s NACS Show, the National Association of Convenience Stores’ annual conference, employment lawyer Caroline Brown offered her forecast at what’s next for the most top of-mind labor laws and how operators should brace for impact.
The overtime rule
In August, a Texas judge’s ruling largely defanged the Obama administration overtime rule, which more than doubled the salary threshold at which workers are exempt from overtime to $47,476, or $913 per week. Barring an appeal to that ruling from the Department of Labor, Brown says operators should prepare for a new threshold in the $600 range. “Look at anyone you employ with a salary just above or below $650 a week,” said Brown, an attorney at law for Fisher & Phillips LLP in Atlanta. Brown recommends operators think long-term: move up a scheduled raise that would put workers above the threshold.
Brown also noted a way operators can exempt workers from the overtime rule without bumping their pay. Operators can bypass the rule if they designate team members as commissioned employees, who get a piece of the profits. “Not only does this have them meet the exemption, but it gives them a stake in how well the store is doing,” she said. Overall, Brown recommended to err on the side of caution when reclassifying employees.
In June, the Department of Labor withdrew its expanded definition of the joint employer standard, which held franchisors more accountable for the labor violations of their franchisees or subcontractors. The legal construct is broad, Brown said, but not baseless. “I’d expect [the definition of joint employer] to be somewhat similar from the new admin,” she said. Often, operators call Brown and ask if they are liable for certain franchisee or subcontractor policies. “Just the fact that you’re calling me about this question is a tip-off that you know way too much and might hint that you are more of an employer than you thought,” she said.
Business as usual
Restaurateurs shouldn’t expect Trump’s labor department to sit on its hands, however. Brown has seen the law and business communities talk about the new administration like they will no longer heed the law. “The DOL’s job is to enforce labor law,” she said. “But we hope the new administration will be able to educate and set up resources that help employers set up the right policies in the first place.”