Proposed Overtime Regulations’ Impact on Retail and Restaurant Managers

Proposed Overtime Regulations’ Impact on Retail and Restaurant Managers

A new report from the National Retail Federation shows that the majority of retail managers — who are among those which will be most directly affected by the Department of Labor’s proposed rulemaking aimed at forcing certain managers from salaried career positions into jobs paid on an hourly basis — overwhelmingly disapprove of these efforts. Retail managers say the proposed changes to the federal Fair Labor Standards Act regulations show the Department greatly misunderstands their roles in the workplace and would effectively strip retail managers of their salaried status, generating negative consequences for the entire industry. Key findings from the report:

Changes will have negative impact on morale, customer experience

Retail managers overwhelmingly disapprove of the proposed regulations, arguing that it could have negative implications for managers, employees and their customers.

  • 75 percent of respondents said the changes would diminish the effectiveness of training and hinder managers’ ability to lead by example.
  • Roughly two-thirds predicted employee morale would decrease.
  • Roughly eight in ten (81%) respondents said that customers would be negatively affected if managers were excluded from performing non-managerial tasks.

Changes will undermine managers’ career stability, personal satisfaction

In fact, roughly 85 percent of respondents felt that if they were transitioned from salaried to hourly pay the change would have negative consequences on managers themselves.

  • Nearly half (45%) of respondents said the changes would make them feel as though they are performing a job instead of pursuing a career.
  • Under the new regulations, 41 percent of managers believe they would be paid less since hourly employees are not eligible for bonuses.

Managers wear multiple hats: Non-managerial tasks important part of position

Retail and restaurant managers already see themselves dedicating the majority of their time (66%) to managerial tasks without any federal intervention. The vast majority of managers report that some of their daily tasks overlap with those of hourly employees — and they see this as essential to serving in their capacity as a manager to staff, customers and themselves.

  • Roughly 66 percent of managers’ time is spent managing employees.
  • Additionally, 50 percent of retail and restaurant managers’ time is devoted to customer service.
  • Given this reality, managers fear that any changes made to the “duties test” portion of the executive exemption could impact the entire industry.

Changes will further eliminate middle class management positions

Retail is a true meritocracy — providing countless opportunities and pathways to move from an entry-level job to management. Retail and restaurant managers have a unique understanding of their business, which is rooted in hands-on industry experience. Over nine in ten retail and restaurant managers value personal satisfaction (95%) and career stability (94%) in their professional lives most highly.

  • Two-thirds of retail and restaurant managers (67%) say that when charting their career path, the phrase, “I moved up the ranks in the retail/restaurant industry first (for example, as a store associate/server/drive-thru employee,” describes them completely.
  • A majority (52%) reports that an inherent desire to work with people — not paper — motivated them to become a retail or restaurant manager.

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