Imagine this: You find your first job bussing tables at a local restaurant for an hourly wage. You work hard, you learn valuable skills so you get promoted, first to a server position, and then to be a manager. That management position comes with a salary and benefits, a milestone in your career.
Suddenly, though, your boss tells you that despite your hard work and commitment to your job, you're going to become an hourly employee again, and you lose the salary and benefits that you worked so hard to get.
This is not some hypothetical for Octavio Mantilla or for millions of restaurant employees across the country. Octavio came to New Orleans from Nicaragua as a child. He joined the restaurant industry at 16 years old as a dishwasher, and later waited tables. While working in the industry, he earned a bachelor's degree from Tulane University and an M.B.A. from the University of New Orleans. Now, he is the co-owner of Louisiana-based Besh Restaurant Group. His success story is not unique. More than 80 percent of restaurant owners and 97 percent of restaurant managers start their careers in non-managerial positions and move up with new, performance-based incentives. And it is exactly the kind of success story that will be jeopardized by the new overtime rule.
As Octavio testified at a recent Senate Committee on Small Business and Entrepreneurship hearing, "In our industry, managers need to have a 'hands-on' approach to ensure that operations run smoothly. Any attempt to artificially cap the amount of time exempt employees can spend on nonexempt work would place significant administrative burdens on restaurant owners, increase labor costs, cause customer service to suffer and result in an increase in wage-and-hour litigation."
The changes could make it extremely difficult for many employers in our industry to maintain the flexibility, teamwork and upward mobility that are the hallmarks of working in restaurants. Those attributes and the opportunities to grow and advance are what attract employees to restaurants each and every day. Many of our employees will remain in the restaurant industry, earn promotions and reach the management level, earning a salary, as opposed to being paid hourly.
By more than doubling the current minimum salary threshold for exempt employees, this administration is all but ensuring that some salaried positions will now be forced into hourly positions. Those years of hard work an employee has put into his or her career to reach a salaried position are now in jeopardy because of this latest move by the administration. This rule will create tough conversations between employers and employees, forcing restaurateurs to determine whether managers will continue to be salaried or shift to hourly employees.
We have consistently urged the Department of Labor to work with us and restaurateurs like Octavio to ensure that the regulations they put forward do not have unintended consequences for our restaurateurs and their employees. The overtime rule and the cumulative impact of regulations from the Obama administration are the reason why restaurateurs now rank government as the top challenge facing their business. It is now up to Congress to use its oversight and budget authority to address this and other regulations that are creating such a difficult environment for employers and employees.
Simpson is the executive vice president of policy and government affairs for the National Restaurant Association.