Broad Impacts of ‘The Final Rule’ for Restaurants

Effective December 1, 2016, restaurants across the U.S. will be required to pay managers a salary of at least $47,476 per year in order to continue to treat them as exempt employees, that is, employees who aren’t owed overtime pay. The U.S. Department of Labor’s new Final Rule announced May 18, more than doubles the current minimum salary that must be paid to treat employees as exempt. Well before the December 1 deadline, restaurant operators must evaluate their options and formulate an action plan that is affordable and effectively manages morale and house culture.

Restaurants Will Feel Brunt of the ChangeWhile the Final Rule governs employers across industries, restaurants, bars and nightclubs will be among the hardest hit.  As compared to many other sectors, restaurants much more commonly employ lower-paid managers whom they classify as exempt, for example, kitchen managers, front of the house managers, shift managers and even general managers. According to indeed.com, for…