New overtime threshold proposed by Department of Labor

Finance to Table Education for Operating Your Restaurant

overtime, restaurantIn case you missed it, the U.S. Department of Labor (DOL) announced on March 7, 2019 its proposal to raise the minimum salary for employees to qualify for Fair Labor Standards Act white-collar exemptions from $23,660 per year to $35,308 per year. Employees making less than this amount would automatically be eligible for overtime pay beyond 40 hours per week. The proposal does not call for automatic adjustments to the salary threshold.

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If you remember back to 2017, the previously proposed minimum salary was $47,476 a year and was expected to go into effect on December 1, 2017. Many restaurant companies changed their compensation packages for managers in anticipation of this proposed increase. With this new proposal, if you have any salaried employees making less than $35,308, now would be a good time to evaluate your compensation strategy.

This latest proposal has been welcomed by both the National Restaurant Association and the International Franchise Association and is expected to go into effect on January 1, 2020. For additional information, click here to read the press release from the DOL.

If you are ready to chat with an experienced restaurant CPA, contact a Henry+Horne restaurant professional.