Washington, D.C. – Today, the Department of Labor (DOL) announced a final rule modifying overtime regulations, which will raise the overtime threshold to include all employees earning up to $58,656 annually. The rule is set to be implemented in two stages, with an initial increase scheduled for July of this year followed by another in January 2025.
In response to these changes, Sean Kennedy, executive vice president of Public Affairs for the National Restaurant Association, expressed concerns about the impact on small business restaurant owners. Kennedy stated, "This rule will exponentially increase operating costs for small business restaurant owners who are trying desperately to maintain menu prices for their customers. And because DOL created a one-size-fits all rule based on national income data, rather than regional data, this change is going to disproportionately impact restaurant owners in the South and Midwest."
Kennedy further highlighted the Association's objections to the rapid increase, noting, "The Association and Restaurant Law Center pushed back on a significant increase following so soon after an increase just four years ago. Business conditions have changed significantly for restaurant operators in that time. It’s unfortunate that DOL did not heed our concerns, especially as it relates to regional discrepancies and the burden of automatic increases every three years."
The National Restaurant Association provided insights into the unique operational challenges faced by restaurants, where small businesses typically operate on a narrow profit margin. With food and labor costs representing significant portions of expenses, any increase in regulatory requirements can pose additional financial strain on restaurant operators.
According to analysis by the National Restaurant Association, the industry has seen notable cost escalations in recent years, making it challenging for restaurant owners to maintain profitability. The upcoming changes to the overtime threshold are expected to add to these financial pressures, particularly for businesses in certain regions.
The National Restaurant Association and the Restaurant Law Center have jointly shared their concerns regarding the new overtime regulations, emphasizing the need for a more nuanced approach that considers the diverse operational landscapes across different regions.
