New Department of Labor overtime rules take effect on December 1. Is your restaurant ready for the impact it may have?
Restaurant owners and operators have been bracing for the new overtime rule, which was set to take effect on December 1 of this year. However, just before the Thanksgiving holiday, a U.S. District Court Judge granted an emergency motion temporarily blocking this legislation, which would have extended overtime pay for an estimated 4.2 million American workers.
AS a small business and restaurant owners preparing your employees for the shift, you may be confused and concerned about where to go from here. The injunction is still temporary and the new rule, if it takes effect, could have an impact on your cash flow. Here are some pointers from the National Restaurant Association:
- If any of your restaurant’s salaried employees make less than $47,476 per year, you may soon be required to track their weekly work hours and pay overtime if they work more than 40 hours per week.
- This salary level is double the current requirement—and that may have a tremendous impact on your day-to-day operations if the rule ultimately takes effect.
- This salary threshold may be automatically adjusted every three years going forward.
Many businesses have already begun tracking salaried employees’ time so they have a baseline for the number of hours worked each week for every. And although you have had some time before you need to make difficult choices—such as limiting their hours to 40 per week, changing classifications, or considering salary increases—it’s wise to start building a better understanding of how much your employees are working, according to Jeremy Quittner of Fortune.
Small Business Trends suggests the following steps:
Consider developing a plan to get out in front of any changes, should they take effect. Do you need to add staff? Adjust operations? Budget for new timekeeping software? All of these considerations can have an impact on your restaurant’s cash flow situation, and it’s best not to be caught off guard.
A capital advance can also help you get out in front of these new expenses.