WASHINGTON, 2015-9-4 — /EPR Retail News/ — The National Council of Chain Restaurants told the Labor Department today that the department’s proposal to expand overtime eligibility would hit its member companies harder than other businesses, requiring drastic changes in staffing structure, severely limiting promotion and career opportunities for would-be managers and possibly putting some restaurants out of business.
“The regulations which the department is proposing to change were modernized in 2004 to specifically recognize the unique role that supervisors in restaurants must perform and the exceptional career advancement opportunities that restaurant provide to hourly workers,” NCCR Executive Director Rob Green said. “If allowed to stand, the one-size-fits-all proposal will harm chain restaurant managers’ career advancement, eliminate key management positions, and have a negative impact on customer service and workplace morale. We need policy that encourages workplace advancement and this is a step in the wrong direction.”
Green’s comments came in a letter to DOL, which has given businesses until Friday to respond to a proposal that would make most workers earning up to $970 a week eligible for overtime, up from the current $455 set in 2004. DOL is also exploring whether managers who make more – who can currently be declared exempt from overtime if they meet tests such as having supervision of other workers as their primary duty – should face additional restrictions in order to remain exempt.
Green called the $970 figure, intended to give overtime to the lowest-paid 40 percent of workers in all industries nationwide who now receive a fixed salary, “arbitrary.” He said DOL should use the formula it used in 2004, which based the $455 figure on the lowest 20 percent of workers in the south rather than nationwide and in retail rather than in all industries.
Green said one chain with 250 restaurants estimates that 85 percent of its managers have base salaries below the $970 threshold. Another chain expects it would have to reclassify 90 percent of its managers as hourly, he said. The number also fails to recognize regional difference in cost-of-living and pay, he said.
“Given the intense competition and low profit margins under which chain restaurants operate, the increased salary level proposed will have a particularly adverse impact on restaurant operations, and in some cases will threaten their business viability, especially in low-cost and rural locations,” Green said.
Green said NCCR strongly opposes any changes in the job duties tests, along with a provision of the proposal that would automatically increase the dollar threshold each year.
NCCR is the leading trade association exclusively representing chain restaurant companies. For more than 40 years, NCCR has worked to advance sound public policy that best serves the interests of restaurant businesses and the millions of people they employ. NCCR members include the country’s most-respected quick-service and table-service chains. NCCR is a division of the National Retail Federation, the world’s largest retail trade group.