Restaurants might have dodged a bullet with DOL's overtime-pay proposal. Here's why.

Working Lunch: Restaurants will feel the impact, but the new rules could have been far worse.

After waiting months for an update of overtime pay regulations, restaurateurs have finally learned how many more of their salaried employees will likely be entitled to time-and-a-half pay for hours exceeding 40 per week.

So how much of a burden are the proposed rules likely to be?

“The industry dodged a bullet here,” said government-affairs veteran Joe Kefauver.

“It could have been a lot worse,” agreed Franklin Coley, Kefauver’s business partner in the Orlando, Fla., political consultancy Align Public Strategies.

The pair spend much of Working Lunch, their weekly government-affairs podcast, explaining why restaurateurs can breath easier now that the overtime changes have been spelled out by the U.S. Department of Labor (DOL).

Sure, another 3.6 million salaried workers will now be entitled to overtime pay when they work more than 40 hours a week. But, they note, the impact on employers could have been much greater. 

Some officials wanted to extend eligibility for overtime pay to any salaried employee earning less than $78,000 a year, a steep jump from the current threshold of $38,568. DOL settled on a cutoff of about $58,000.

“Twenty-thousand dollars is a big jump, there’s no doubt about it,” said Coley.  Plus, “there are some elements here in addition to the threshold that will be concerning to operators,” particularly the provision for an “automatic escalator,” an adjustment of the exemption threshold every three years.

Still, “the whole business community gave a sigh of relief,” said Kefauver.

Learn why they believe that relief is justified—and what the proposed regulations could mean for your operation—by downloading this week’s episode of Working Lunch from wherever you get your podcasts.

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