On June 30, the U.S. Department of Labor published a Notice of Proposed Rulemaking related to overtime requirements for employees. The notice should be regarded as an urgent head’s-up for anyone in the restaurant business, because under the proposed rules, the minimum salary owners will have to pay in order to exempt their employees from eligibility for overtime is going to increase more than 100 percent.
If the proposed changes happen, you may need to start calculating and paying overtime to anyone who earns less than about $950 a week or around $50,000 a year. In most cases, that kind of shift in regulations could totally disrupt your current task scheduler methods as well as record keeping, workflow management, and budgeting. Another proposal on the table would call for automatic annual increases in the salary level where overtime exemptions kick-in, which could mean that there will be incremental changes and increases in the threshold on a yearly basis.
What this means for anyone running a restaurant – and virtually any other kind of business – is that you now have about 6-12 months to get ready for new regulations that will likely be in the pipeline soon. If you have been procrastinating the implementation of smarter workflow management software, for example, or have recognized the value of using apps that streamline your business processes but haven’t chosen one yet, now is the time to stop pondering and start acting. Businesses that don’t have task management software will only compound the challenges they face due to proposed new regulations.
Why are restaurants particularly vulnerable to the financial or managerial impact of these proposed changes? Within the restaurant industry there are a significant number of low and midlevel managers – including bar managers, sous chefs, shift managers, and others – who may now be exempt from overtime benefits. But if the Department of Labor institutes the new rules, you may have to reclassify all of those vital employees and also make substantial adjustments to your payroll, your scheduling, and the overall managerial and labor structure of each of your locations.
So what can you do to help lessen the impact of these pending increases in labor costs? Can you cut down on crew member hours by streamlining processes for completing routine tasks like cleaning and prep work? Can you reduce the number of hours your supervisors and managers spend at work by managing tasks like ordering, inventory counting and scheduling more efficiently? These are just a few of the many questions that proactive owners and operators need to be asking themselves in order to identify the best practices and solutions.
One of the first orders of business should be a complete reevaluation of your existing technology. There are literally hundreds of new management apps and workplace software programs available to help solve these kinds of challenges quickly, sustainably, and affordably. But don’t delay. Start shopping for appropriate solutions now, while there is still time. You will probably find that the time and money you save by investing in the right software more than makes up for the increase in labor costs you may face due to changing regulations.