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Labor Department Issues New Overtime Rules

The Labor Department issued new rules this week, nearly doubling the amount for salaried employees exempt from overtime pay (under the Federal Labor Standards Act). The limitation is now raised to $913 per week or $47,476 per year.

"This will effect managers and assistant managers at restaurants," said National Restaurant Consultants president David Kincheloe. "And it could also effect the back of the house where chefs and sous chefs are salaried and are already generally working 50 or more hours a week."

Restaurant employers will be required to configure the hourly wage of all salaried employees making less than $913 per week and compensate time and a half for work weeks longer than 40 hours.

"In most instances, this will mean either a salary raise or cut hours," explained Kincheloe.

It could be complicated to cut kitchen staff hours given that the average work week for a chef or sous chef is more than 40 hours. To address the issue with management, Golden Corral recently announced they would be switching all assistant manager positions to hourly positions. Whatever tactic is used to adjust for the new rules, the costs will likely be passed along to customers through menu increases or changes.

"This will look different for different establishments," said Kincheloe. "And our restaurant consultants are experts at analyzing business plans from a variety of angles. We can determine the best way for a business to accommodate these changes."

If you are confused about the new ruling or how to implement the changes in your restaurant, or if you need assistants making adjustments in your menus, contact our restaurant consultants today. 

Photo by 401(K) 2012.