Adapting to the Department of Labor's New Final Rule

Are Your Employees Still Exempt?

By John Mavros Attorney at Law, Partner, Fisher & Phillips, LLP | October 16, 2016

The Department of Labor (DOL) Final Rule promulgated new regulations that will go effect on December 1, 2016. All employers need to know how these regulations will change the test for exemption to understand what they need to do in response. This article will review the basics for the most common exemptions from overtime under Federal law and will also provide an executive summary of the key changes made by the Final Rule.

One of the biggest myths in the workplace is that a "manager" who is paid a salary is automatically an exempt employee. Indeed, hospitality employers will cite many reasons as to why paying a salary is preferred. It can be more convenient because it provides more flexibility and control over scheduling. It avoids the hassle of paying overtime and providing meal and rest periods. It also ensures that employees are not offended by having to clock in and out with other "hourly" employees.

However, all hospitality employers need to know that an employee must be paid overtime (and provided meal/rest breaks) unless the employee fits "plainly and unmistakably" within a specified exemption. To be exempt from overtime under the common "white collar" exemptions, employees must satisfy two criteria: (1) the employee must be paid a minimum salary basis not subject to reduction based on quality or quantity of work ("salary basis test"); and (2) the employee's primary job duty must involve the kind of work associated with exempt executive, administrative, or professional employees ("duties test"). Paying someone a salary and calling them a manager does not suffice.

Given this backdrop, it is crucial for all employers to understand what the U.S. Department of Labor's (DOL) Final Rule means for their business and how to make sure that they don't run afoul of the new requirements.

The Department of Labor's Final Rule Changes the Test for Exemption

On December 1, 2016, the U.S. Department of Labor's (DOL) Final Rule went into effect. The new rule changes the salary basis test referenced above by increasing the compensation level needed for Executive, Administrative, Professional, and highly compensated workers to be exempt under FLSA's Section 13(a)(1). The DOL did not change the duties test, but the following summary highlights the main changes:

Choose a Social Network!

The social network you are looking for is not available.

Close
Coming up in February 2019...

Social Media: Getting Personal

There Social media platforms have revolutionized the hotel industry. Popular sites such as Facebook, Twitter, Pinterest, Instagram, Snapchat, YouTube and Tumblr now account for 2.3 billion active users, and this phenomenon has forever transformed how businesses interact with consumers. Given that social media allows for two-way communication between businesses and consumers, the emphasis of any marketing strategy must be to positively and personally engage the customer, and there are innumerable ways to accomplish that goal. One popular strategy is to encourage hotel guests to create their own personal content - typically videos and photos -which can be shared via their personal social media networks, reaching a sizeable audience. In addition, geo-locational tags and brand hashtags can be embedded in such posts which allow them to be found via metadata searches, substantially enlarging their scope. Influencer marketing is another prevalent social media strategy. Some hotels are paying popular social media stars and bloggers to endorse their brand on social media platforms. These kinds of endorsements generally elicit a strong response because the influencers are perceived as being trustworthy by their followers, and because an influencer's followers are likely to share similar psychographic and demographic traits. Travel review sites have also become vitally important in reputation management. Travelers consistently use social media to express pleasure or frustration about their guest experiences, so it is essential that every review be attended to personally. Assuming the responsibility to address and correct customer service concerns quickly is a way to mitigate complaints and to build brand loyalty. Plus, whether reviews are favorable or unfavorable, they are a vital source of information to managers about a hotel's operational performance.  The February Hotel Business Review will document what some hotels are doing to effectively incorporate social media strategies into their businesses.