The shifting cost of being an employer

Finding a champion in today’s administration, restaurant employers have had reason to applaud the Department of Labor multiple times over the past few months. The latest: Employee health insurance could become more affordable for restaurants and other small businesses under a regulatory change proposed in January by the U.S. Department of Labor. The measure would enable employers like restaurateurs to band together, even across state lines, for more leverage in negotiating rates from insurance companies. Forming a group could also provide the scale that enables larger companies to self-insure, or essentially form a funding pool of sufficient size to pay employees’ healthcare expenses. 

Small employers could come together on the basis of geography or industry to obtain insurance for employees. The expectation is that existing national trade groups and affiliations such as franchise associations would add coverage options for members. 

The proposed change—about which the DOL will collect comments from the public until early March—is just one of the recent examples of the DOL becoming more employer-friendly under President Trump. The department has also delayed adoption of new overtime-pay regulations, which would have doubled the salary threshold determining which restaurant employees are eligible for overtime pay when they work more than 40 hours per week, as proposed by the Obama administration. 

In December, the DOL also proposed rule adjustments that would allow front-of-house tips to be shared with kitchen employees, reversing the 2011 decision that prohibited tip pooling. Under the proposal, tip pooling would be permitted in restaurants that do not take a tip credit. The move would ideally aid the growing compensation disparity between tipped employees and nontipped kitchen workers, which in its current state is making recruitment for back-of-house positions a steep challenge.


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