# Big changes for exempt employees?



## phaedrus (Dec 23, 2004)

Just wondering what everyone's take is on the proposed changes to the way exempt employees are treated.  As many of you will no doubt already know, salaried workers aren't entitled to overtime so long as they earn $455/week or more and pass "white collar exemption" tests (meaning X amount of their time is devoted to management tasks).  The proposed changes would bump this up to a bit over $50,000 per year, more than doubling the current level.

I know that on the low end many employers have long abused salary; for instance some fast food workers are on the lowest possible salary run while working over 75 hours per week and not really doing any manager functions to speak of.  Those people legitimately are being taken advantage of. But it seems to me that a huge swath of professional chefs will be in a tough spot if the new rules are adopted.  My guess is that 85% or more of chefs and sous chefs in the country would not legally be exempt. 

What would this do to the landscape of the culinary world?  I think this would be a seismic shift, one of the biggest changes I've seen in my 30+ years in foodservice.  And I can't really say I'm excited at the prospect.  Salaried chefs would become uncommon and most would be on the clock.  Obviously some would welcome this but it would bring a raft of unintended consequences...


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## Iceman (Jan 4, 2011)

Where can I sign up to be a $50,000/yr. employee?!? Please??


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## phaedrus (Dec 23, 2004)

IceMan said:


> Where can I sign up to be a $50,000/yr. employee?!? Please??


I'm not sure if you're messing with me or if you haven't looked over the proposed rules. If it's the latter in a nutshell it would prohibit salary for employees making less than $50,920 or so. Or somehow you could be on salary but you would have to be paid overtime for work beyond 8 hours in a day and/or 40 hours in a week...which wouldn't really be salary would it? Obviously if you were salaried now at $40k and the proposed rules were adopted your employer would have to give you an $11,00 raise or drop you off of salary and convert you to hourly status. Now if you had been doing 80 hours a week for $40k you'd maybe be relieved to go to hourly! But the reality isn't that you'd get 40 hours of OT a week. In all likelihood your hours would be cut quite a bit. Which again, some would welcome.

But obviously there are benefits to salary, for the employer and the worker. The big advantage for the worker is a minimum predictable paycheck. Much of my working life I've enjoyed knowing I could fill my checkbook register out six months at a time if I wanted. Flexibility is another biggie IMO. Now I work like a dog when I'm busy but I can flex my time a bit when it's slow. It's a big deal for the owner to have me and my Sous on salary. We're the core of the kitchen and salary is an important tool to manage labor.

I will state for the record that I'm a liberal and a progressive, so it pains me to say this but GOD SAVE ME FROM THE GOOD INTENTIONS OF LIBERALS! There is no magic pot of money out there to bump my sous up $15,000. If this change occurs he'll be switched to hourly wage which will piss him off. He likes the stability of salary. And course, owners being owners, the temptation is always going to be there to trim the largest wages when it's slow. Salary is a protection for many folks. Chef is one of the few jobs out there now where you can bust your ass and work your way into the middle class. I think that tens of thousands of good jobs will go away.


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## phaedrus (Dec 23, 2004)

BTW, I forgot to mention that a [fair] salary also compensates chefs for the work they do "off the clock". I for one have always done most of my scheduling, feature menus, etc at home or somewhere off premises. I have generally felt my salary was adequate to cover the time I spent outside of normal work hours on kitchen stuff.


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## grande (May 14, 2014)

My thoughts are more or less like yours. Here in Seattle we've had minimum wage increases and mandatory PTO, on top of obamacare, etc; it doesn't seem to be discouraging new businesses but I can't say I envy owners.

The results for me, personally, should be good. Either a)a raise or b)fewer hours. In the current labor market I could probably make as much or more as I am now working 50 hours with two jobs- I just don't WANT to. But we'll see.


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## phaedrus (Dec 23, 2004)

Maybe I'm just old and afraid of change./img/vbsmilies/smilies/lol.gif But I work for a small restaurant that's looking at opening a second location. It's going to doubly hard on us if this comes to pass. Already in MN the min wage is much higher and servers earn $9/hour too. The taxes here are stupid high compared to the state we came from. It's hard to imagine how we'll staff the second place if we can't have salaried management in the kitchen. An Exec yeah but not a Sous. I dunno, maybe I'm lacking in imagination but this doesn't feel like it has an upside to me as a chef or to a guy working for a small businessman with a lot of obstacles in his path. Sometimes I feel like the ruling class of this country won't be happy til we have 25 Mega-corps and everyone else on the dole.


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## chefwriter (Oct 31, 2012)

I think it's high time this issue was addressed. 

     I've been working on an excel spreadsheet to figure this out for my own sake because when someone mentions salary, I would like to 

know right away what that means hourly. 

     As an example, when you are paid $50k per year and work 40 hours a week, you get paid $24 per hour.

50 hours per week you make $19.23 per hour.

 60 hours per week, you make $16 per hour. 

If you work 70 hours per week, that drops to $13.74 per hour. 

$40k a year salary at 60 hours a week is $12.82 per hour. At 70 hours per week it is $10.98 per hour.

If you work for $15 an hour and get paid time and a half for overtime, working 50 hours a week you would get paid $42,900 per year. 

      This does not typically include any other benefits such as sick leave, paid holidays, accrued vacation days, health insurance or any other benefits.

You miss family time, holidays, weddings, funerals, etc.  This has long been an accepted part of the Chef culture. 

     Back in the seventies the ACF was instrumental in getting the US government to reclassify a chefs job as a Professional or white collar job. But the upgrade in compensation for that never seems to have happened. 

There has to be a better, clearly defined line between salary and hourly in the kitchen both in duties and compensation. I can't say what the results will for the industry be but I am glad we may finally be working on the problem.


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## chefbillyb (Feb 8, 2009)

I'm just happy I'm not getting into the restaurant business with the new $15 min wage. I got out of business because I was tired of hiring people that didn't really want to work. It was bad enough I had to hire these people at $8 to $10 an hour. It would kill me to pay them $15 an hr in the days to come. If I were to get out of retirement and open a business today I would do it with the least amount of employees as necessary. In fact zero employees would be the number I would have. I have been involved in or owned 25 food services in my career. There are only a handful of people I would put in the Great employee category. I would put many more of the people I hired in the " I'll show up, do my job but quit to make .25 cents more down the road.


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## grande (May 14, 2014)

Things are going to change for sure, it's hard to see restaurants continuing on the "old model", though, knowing how tight the margins are.


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## Iceman (Jan 4, 2011)

How tight are the margins for real, in the _"Corporate Restaurant"_ world? You know ... where _shareholders_ are more important than _WORKERS_?!? Places with CEO's that make north of $35-million / year have nothing to tell me about anything.

*Phaedrus* my friend ... My first comment was just based on the fact that I don't make $50,000. I could really go for a pay bump like that. Can you help me out?


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## chefbillyb (Feb 8, 2009)

IceMan said:


> How tight are the margins for real, in the _"Corporate Restaurant"_ world? You know ... where _shareholders_ are more important than _WORKERS_?!? Places with CEO's that make north of $35-million / year have nothing to tell me about anything.
> 
> *Phaedrus* my friend ... My first comment was just based on the fact that I don't make $50,000. I could really go for a pay bump like that. Can you help me out?


Iceman, If you worked as hard as you do in another profession you would have already moved up to CEO. The foodservice business has never paid their employees nor appreciated their employees like other professions. There also isn't a whole lot of loyalty running around in this business.


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## phaedrus (Dec 23, 2004)

IceMan said:


> How tight are the margins for real, in the _"Corporate Restaurant"_ world? You know ... where _shareholders_ are more important than _WORKERS_?!? Places with CEO's that make north of $35-million / year have nothing to tell me about anything.
> 
> *Phaedrus* my friend ... My first comment was just based on the fact that I don't make $50,000. I could really go for a pay bump like that. Can you help me out?


Hahaha, it's all good. Can't help you there, I'm a smidge below fitty myself. I used to work for another company, was with them for almost two decades. There I was making pretty good money. But the owner of my current place was the GM at my last gig. When he struck out on his own I decided to follow. No knock on my former employer- they're awesome. Some day I may work for them again. But this place is smaller, different, more personal. I have a ton of freedom to do whatever I want so long as people will eat it. We don't have the gross of my last place (we do about 1/3 of what the old place did) since this place is much smaller. But there's a ton of upside, and we are looking at a second location. So there's a pretty good chance for growth.

The great thing about my current gig is that the owner doesn't want me working 60 hours. His goal is that I work 47 or so. But I'm old-school...I just can't make myself do less than 50 but I like being at work. That's what has me exasperated about the proposed changes. I'm doing well, making around $18/hour on the average. I"m not sure of the details of the possible changes but I don't need to be saved from an oppressive slave-driving owner; I'd rather be saved from bureaucrats that think they know better for me than I do.


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## Iceman (Jan 4, 2011)

_"I have a ton of freedom to do whatever I want so long as people will eat it."_

_CRACK ME UP_ my friend. That statement right there makes it real easy to take a little less pay.

_We work in kitchens ... It ain'te rocket surgery. _​


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## phaedrus (Dec 23, 2004)

I guess in a way I don't have any freedom!/img/vbsmilies/smilies/redface.gif The customers hold me hostage!/img/vbsmilies/smilies/lol.gif So often chefs have so much ego that they think the customers are breathlessly waiting for their next stroke of inspired culinary genius. But it's the customer that ultimately makes the call. When I first came into the place I did higher end stuff and it went over okay, but I have more luck with the folksier stuff to be honest. Flatbread pizzas, comfort foods, etc. I try for a mix of "high falutin" dishes and nicer version of stuff people's moms made back when everyone cooked at home. Bar food goes pretty well too; potato nachos, bruschetta, shrimp tacos, etc.


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## chefross (May 5, 2010)

It pains me to say this but the hospitality industry will probably be exempt (pardon the pun) from these rules like so many others.

The restaurant world is no better nor worse then any other industry that employs salaried employees.

Unless you are in a corporate or high end job as a high up Chef you're not going to make that kind of money.

So a Chef making 43,000 a year would either be dropped to an hourly status or raised up to the 50,000 level.

Sounds daft.

Funny how the powers that be like to fool with the money and payroll, but the work load never changes.


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## Iceman (Jan 4, 2011)

I've never been one to turn down good pay. Believe me ... I take it. However, I'm not a person that gouges anyone paying out that pay. Nobody has ever lost money hiring me.


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## chefbillyb (Feb 8, 2009)

I would recommend that the goal for every chef s/b to own their own. If I thought I would have to work for someone else my whole career that would have killed me. I think the reward for putting up with all the lies and broken promises along the way s/b owning your own. The point I'm getting to is, you can't make enough money in this business to make it worth staying in it long term. You have to work your ass off for someone else day in day out for nothing. I would tell everyone to work hard while your young. Have the main goal being owning your own food service. If I stayed working for other people the last 20 years of my career my salary would have been between 60K and 80k. The first year and every year after I started my own business I made 6 figures. You can't make any real money working for someone else..........Chef Bill


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## phaedrus (Dec 23, 2004)

Maybe you hit the jackpot Bill, but your experience is not universal.  Of course it's easier to get rich working for yourself but it's easier to lose your ass, too.  I'm glad to see it worked out well for you but while I don't know if  you do catering or own an actual restaurant but the latter is extremely expensive to get off the ground.  I've done five restaurant openings just as a hired gun- either as a chef or just a cook- and had a big hand in the planning of the one I'm at now.  It's just terrifyingly expensive to do it right.  Personally I'd rather work at someone else's place than own my own food cart or catering deal.  If I can't do it right the way I want to then why would I bother doing it half assed just to make money?  At 47 years old I still care about food.


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## chefbillyb (Feb 8, 2009)

Phaedrus said:


> Maybe you hit the jackpot Bill, but your experience is not universal. Of course it's easier to get rich working for yourself but it's easier to lose your ass, too. I'm glad to see it worked out well for you but while I don't know if you do catering or own an actual restaurant but the latter is extremely expensive to get off the ground. I've done five restaurant openings just as a hired gun- either as a chef or just a cook- and had a big hand in the planning of the one I'm at now. It's just terrifyingly expensive to do it right. Personally I'd rather work at someone else's place than own my own food cart or catering deal. If I can't do it right the way I want to then why would I bother doing it half assed just to make money? At 47 years old I still care about food.


I was your age when I started my business. There are many ways of getting your own or part of your own. Small restaurants, diners, food wagons and food trucks, having a partner and so on. I learned many years ago, " It doesn't matter where I am as long as I can be who I am where I'm at" By this I mean I want to be able to work or own a food service that I can practice my skills. I'm not saying owning your own is easy, nothing in this business is easy. I think we live in the day that you don't have to have a 2 million dollar B&M in order to display your skills. A good chef with great vision could make it anyplace they set up business. I think you need to be constantly working toward the dream of owning your own. I say to all chefs that have a dream to own their own not to ever stop dreaming. Life isn't about settling for what we have, It's about fighting for what we want. I've talked with many chefs that said it would cost a million to start a restaurant the way they want. I'm saying that some dreams may not come all at one time. Your first restaurant/catering business or whatever may not be exactly what you visioned. I'm not putting down anyone who is working in a foodservice. I feel in many cases a chef will never make the money he/she can working for someone else. All the chefs I know have given more than they have every gotten back. That is pretty discouraging to think we can work in this business and be limited financially forever. I feel the only way to get, or put you and your talents to work for you is to own your own. When you work for someone they determine how much make. When you own your own business, your drive, determination, and skills will dictate your financial worth. In your comment you said "I hit the jackpot" That may be true. There is one thing I do know, If I wasn't good at what I did the jackpot would have never been hit.......Chef Bill


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## phaedrus (Dec 23, 2004)

I'm glad owning your own business is fulfilling, Bill, but not everyone has the same dreams.  And while starting a business is a worthy endeavor it's drifting from the point of the thread.  I agree that only by owning your business will you reap all the benefits but not every cook and chef can or will go that route.  I am just trying to sound out other chefs to see 1) if they have any insight into how the news laws may be implemented and 2) how it will affect those of us that have to work under the proposed rules.  I agree with your comments but that's not a direction I'm in a position to go right now for myriad reasons that probably won't be of interest to the forum.


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## phaedrus (Dec 23, 2004)

It looks like new rules have been formally adopted.  The one concession to reader comments is that the threshold has been lowered to $47k and change, down from the $51k and change they initially wanted.  It appears that the new rules will take effect on Dec 1st so now is the time to start planning.


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## chefnicknack (Aug 13, 2013)

This is a long time coming, & directly combats the BOH employee shortage. Sorry to say, but millenials have figured out that working 60+ hours a week, at $10 an hour, every holiday & weekend isn't worth it when there are so many other options out there.

This will have a domino effect. Menu prices will slowly go up, albeit retaliation from customers. Management will become hourly, with owners hiring more staff to prevent overtime. Etc.

Despite the negative outlook so far, this is the only way the industry will attract good talent again. At the end of the day, we work to earn a paycheck to support ourselves & our families


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## Iceman (Jan 4, 2011)

OK ... Owners will hire more staff to prevent overtime. How exactly is that going to _"attract good talent again"_?!? 
Instead of three(3) guys working 60-hour weeks for minimum wage ... you'll have six(6) guys working 30-hour weeks for minimum wage.

Buy stock in Vaseline. Workers are in for a real hard-one up their derrières.


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## chefnicknack (Aug 13, 2013)

One of the many reasons people stopped wanting to work in kitchens is the absurd hours.


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## chefross (May 5, 2010)

I am trying to understand this.

If a $35,000.00 per year executive Chef works more than 40 hours in a week, he is entitled to overtime pay.

What owner in their right mind is going to raise the salary of this position to $47K from $35K so that they don't have to pay overtime?

I was under the impression that so many hours of that week must be separated into management work and employee work.

An executive Chef has to claim so many hours of his or her work week that they did manual labor as opposed to administrative paper work and managing?

How's that going to work?


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## chefwriter (Oct 31, 2012)

Excellent question ChefRoss. As I'm currently very concerned with the next job offer I take, I've been working on an Excel spreadsheet to help me analyze any potential offers because salary expectations/offers always throw me. 

I don't have access to tax information but the straight math I've done is this.

$35K yr for 40 hours a week is 16.83 per hour. 

$16.83 hour overtime rate is 25.24

$25.24 at 10 hours a week is $13,124.80 per year. 

$35,000 yr +$13,124.80 OT =$48,124.80 per year. 

So working 60 hours a week at a base pay of $16.83 hr with 20hours of OT every week for a year is

$61,249.60

     I don't know how various duties will be separated out relevant to pay.


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## grande (May 14, 2014)

I think the "management responsibilities", etc., were one of the ways that previously, it was decided who did NOT need to get overtime. Under the new rules, if you make less than 47k you will qualify for overtime regardless of responsibilities.


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## rndmchef (Mar 16, 2016)

Well, the FOH managers will be getting a pay raise. The cooks will be left hanging , like usual.

Just a tiny bit frustrating.... Seeing FOH managers who have to be making $45-50k + per year.. Knowing they didn't go to school specifically for the job, if at all. Then seeing them spend half the day in the office eating lunch, looking at their phone or walking around looking busy..
I don't know... If the cooks get paid like feces, why doesn't everyone in the restaurant? The cooks are running around and actually making the food.. Why are the cooks taking horrible wages so the rest of the place can get paid comfortably.. ? I don't understand it..


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## rndmchef (Mar 16, 2016)

But, I remind myself ... 

My father once told me... "Employees always over-value themselves and employers always under-value their employees "

I think this quote should be posted on the kitchen door of every restaurant; as I think this industry embodies this more than most.


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## phaedrus (Dec 23, 2004)

Chefross said:


> I am trying to understand this.
> 
> If a $35,000.00 per year executive Chef works more than 40 hours in a week, he is entitled to overtime pay.
> 
> ...


Jeebus, if an exec is making $35k then they should be jumping for joy at the prospect of the new laws! Obviously if a guy is twelve grand below the threshold they're not gonna bump him up. The tough thing will the folks in the middle ground.

Plus this is going to be a weird new pay negotiation. Say you have been making $40,000 on salary and the owner now if forced to put you on the clock. How the hell you decide what that figure is going to be? Salary negotiation typically occurs before you accept a job, not years into it!


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## chefross (May 5, 2010)

rndmchef said:


> But, I remind myself ...
> 
> My father once told me... "Employees always over-value themselves and employers always under-value their employees "
> 
> I think this quote should be posted on the kitchen door of every restaurant; as I think this industry embodies this more than most.


I love that line.

Cooks and Chefs are very guilty of this. Many think they are the best thing since sliced bread, but all they do is microwave cook or flip burgers.

Not to say this behavior is just in the food service


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## phaedrus (Dec 23, 2004)

Bump! The new rules have been formalized with the threshold being around $47,500. No change for me and no big raise, I'm afraid./img/vbsmilies/smilies/wink.gif Still, my Sous had a sit down with the owner and I and while nothing has been hammered out he understands that we won't have any option but to kick him to hourly. He's not happy about it, predictably, but he also understands there's not a thing we can do about it. Same deal in any state. The sticky wicket is, as I alluded to earlier in this thread, that wage negotiations are usually conducted before you're hired not a year into your tenure. Now we have to figure out how to pay him and how many hours the job is gonna be. Good news for him I expect; in all likelihood he'll be getting a modest raise while seeing how hours cut somewhat. The bad news for me is that I'll probably be the one picking up the extra hours. Yay, me!/img/vbsmilies/smilies/lol.gif


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## dc1346 (Nov 28, 2014)

Ugh ... I left the food service industry because while my contract specified that I had to work a minimum of 50 hours a week, there was no set limit to how many hours I could be made to work. Due to staff shortages, I came to dread going off shift because just when I was about to leave, I'd hear the words, "Oh David could you ..." and I'd find myself filling in at a line cook or prep cook station. One night I even found myself washing dishes! Instead of working a 50 hour week, I worked an 84 hour week for which I received no additional compensation.

I switched jobs and became a Culinary Arts instructor. Last year I earned $64,000. I work a 50 hour week and have weekends, most evenings, holidays off. I also get 2 1/2 months off for  paid summer leave.


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## phaedrus (Dec 23, 2004)

Sounds like a great move for you, DC1346!  No doubt, sometimes salary is slavery.  I'm pretty fortunate that most of the time I don't work much beyond 50 unless I want to for some reason.  Sometimes I'm short or I have to fill in but a big part of taking this job last year was that the owner isn't a believer in grinding people down with 75+ hour weeks.


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## spice77 (Jan 18, 2013)

Grande said:


> The results for me, personally, should be good. Either a)a raise or b)fewer hours. In the current labor market I could probably make as much or more as I am now working 50 hours with two jobs- I just don't WANT to. But we'll see.


It's the same for me, either a sizable raise or no longer working 70hrs a week. I told my banquet manager that unless they decide to fire us, it looks like a win-win. However, here at the country club when tournament season hits and Christmas, it will be difficult with the staff I have to make sure everything is covered. Board of directors mandated no overtime without prior approval, essentially a month's notice. Our GM is spending sleepless nights trying to figure this one out.


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## spice77 (Jan 18, 2013)

I don't believe this surprises anyone

http://www.nrn.com/workforce/department-labor-backs-overtime-changes


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## phaedrus (Dec 23, 2004)

Yeah, once the Golfer in Chief won it was a given that no labor reforms would be forthcoming.


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