How to Manage The New Overtime Regulations

October 4, 2016

Changes to the overtime rules, recently released by the Department of Labor, reveal that the salary threshold to qualify has been raised from $23,600 to $47,476 a year, more than twice the previous figure. When taking into consideration the overhaul of overtime and the countrywide rise in minimum wages, it is anticipated that the restaurant industry will be facing considerable labor costs. As expected, the National Restaurant Association is against the new rules and will be challenging the situation. The NRA stated that even though there was extensive opposition to the final regulations, the DOL went ahead anyway. Employer and non-profit groups have been joined by lawmakers in their disapproval of the DOL for failing to accurately assess the impact of the rules and anticipate immediate legislative efforts to defund, block or nullify the rules, plus possible litigation against the DOL over its process for issuing the final rules and some of its mandates.  

Should the amendment to the overtime rules remain, there are action plans that can be implemented to make it easier to cope.

Being short-staffed will become more costly. When an employee phones in sick or just does not show up for work, a business immediately becomes short-staffed. A more experienced employee or even a manager will sometimes become involved and assume the duties of the missing person. With the hike in the overtime limit, it means that more of the senior staff will qualify for overtime, causing these understaffed episodes to become even more expensive. Making use of technology that can help keep availability data up to date and encouraging workers to cooperate when it comes to filling gaps in shifts at the last minute can help employers to lower incidents of understaffing.

More effective scheduling will become essential. Some employers are still using old methods such as pen and paper or spreadsheets to create employee schedules. This is according to a recent WorkJam survey of more than 500 service industry managers, where 67 percent of employers fall into this category. These dated techniques are time-consuming for managers trying to accommodate both the needs of a business and the requirements of their employees. According to sixty-eight percent of employers, the trickiest part of the scheduling process is coordinating shifts with staff availability and business needs. The recent change in overtime rules means that management time has become even more valuable. It is therefore important, that in order to lighten the administrative load of managers, employers should consider adopting automated scheduling techniques.  

Allowing employees to independently manage their schedules. It is inevitable that employees will want to make changes to their schedules and make frequent contact with each other. However, without the necessary tools that will allow them to communicate and collaborate with each other, it is left to the managers, whatever the time of day, to try and sort out the various requests via emails, phone calls, text messages or by other means. This adds to a manager’s workload and emphasizes the need to streamline methods of communication. To reduce the amount of time that managers spend on organizing shift swaps and cancellations, it makes sense to consider adopting self-service tools for employees.

Cutting staff turnover should be top of the ‘to do’ list. For businesses in the service industry, having to constantly replace staff becomes a very expensive exercise, as newly hired employees take a while to get up to speed. Recruiting, hiring and then training each new employee occupies a great deal of a manager’s precious time and is now even more costly. Figures show that 47.5 percent of hospitality workers left their jobs last year, according to the U.S. Bureau of Labor Statistics. By providing a pleasant work environment that encourages, motivates and rewards loyalty, employers can help lower this figure and enable managers to have more control over their schedules.

Content workers enhance a business.  Although many employers will find the changes in the overtime rules to be a harsh adjustment, a happier workplace can be created by setting up an employee engagement program. By implementing better employee self-service facilities, the administrative workloads of managers can be reduced. Under the new overtime rules, investing in employee engagement will not only help to keep costs low, but also allow an employer to see a return on their investment  in the form of increased sales and better customer service.