Federal wage change raising concerns

Nation's Restaurant News, June 10, 1985 by Ken Rankin

A controversial Federal wage and hour rule change placed on the regulatory "back burner" several years ago is expected to resurface as an area of concern for the food-service industry within the next few weeks.

the alteration involves the Labor Department's policy concerning executive, administrative and professional employees exempt from the Federal Fair Labor Standards Act.

Under current regulations, restaurant managers and other "executive" or "administrative" personnel earning at least $155 per week are excluded from FLSA overtime-pay requirements. ("Professionals" paid $170 or more weekly are similarly dealth with.)

In early 1981 "lame duck" Carter Administration aides approved a whopping 45% increase in those salary thresholds, only to have incoming Reagan officials "temporarily" delay that hike.

After checking out the inflationary impact of the Carter plan (it could add some $500 million annually to the nation's total payroll costs), Reagan's Regulatory Relief Task Force proposed an "indefinite" suspension of the increased salary test levels.

Now, however, officials at the Labor Department's Employment Standards Administration are on the verge of reviving the issue via an "advanced notice of proposed rulemaking." Although Federal wage-hour regulators are not saying when the new "white-collar exemption" proposal will be made public, an official at the agency told NRN it should be out in "a very short time."

Although a higher weekly salary test for overtime pay-exempt employees (particularly one in the $250-plus area, as proposed in 1981) would not be good news for restaurateurs, there may be a silver lining to the upcoming wage and hour regulatory plan.

For years now food-service operators have been complaining of problems in convincing Federal officials that their assistant unit managers and other supervisory personnel actually meet the Labor Department's definition of an exempt "executive" or "administrative" employee.

That situation could change under the department's soon-to-be-released proposal.

"As a result of numerous comments and petitions received from industry groups regarding the duties and responsibilities tests as set forth in the regulations, as well as recent case law developments, the department has concluded that a more comprehensive review of these regulations is needed," Labor officials said.

A separate Labor Department regulatory initiative--the Reagam Administration's controversial plan to "reform" existing Federal child labor ground rules--has been put on ice for at least the rest of this year.

That proposal, advanced nearly three years ago by wage-hour regulators, called for eliminating a number of questionable restrictions on the employment of 14- and 15-year-olds in restaurants.

In addition to expanding the permissible workplace duties of young teenagers, however, the plan also called for allowing youngsters to put in more hours on the job and work later on school nights.

Those work hour provisions evoked sharp criticism from union leaders, educators and other segments, and the entire proposal was withdrawn for further study.

The latest word from the department is that further development of the child labor reforms "is being suspended until after that 1985 'regulatory plan year'" because of "a change in regulatory priorities."