Hotel Effectiveness Blog

Here’s How Hotels Should Prepare For The New Overtime Rules

Labor Costs

If you’ve read our previous blog, you’re aware that the final ruling on the new overtime regulations has been set. Though the new regulations don’t go into effect until December 1st, there are a two important steps hotels need to take now to prepare for this big change.

Step 1:  Identify Impacted Employees Immediately

The first thing we recommend every hotel do immediately is to perform a review to determine if you have any salaried employees who are currently making less than the new threshold of $47,476 per year. List out all impacted employees so that you can determine the scope of what lies ahead. If you are a Hotel Effectiveness customer, click here to find out how to identify impacted employees.

Step 2:  Start Tracking Hours Immediately

You will need some data on how many hours each of your managers are working before making any decisions concerning their exemption status. We suggest you gather three months of hours worked for each employee in order to make the best decision. Ideally, this period would contain busy and slow periods so that you can evaluate a true cross-section of their time at the hotel.

We recommend almost all of your salaried employees and managers should be required to track their hours in a timekeeping system, NOT just those who make below the $47,476 per year threshold. This is important for two practical reasons:

1 – It is not good to stigmatize or draw attention to hotel employees who are below the threshold by having them track hours vs. employees above the threshold.

2 – More importantly, you need to make structural decisions about how many hours every position should work per week both on an average week and a peak busy week. Some jobs naturally have a 40 vs. 45 vs. 50 hour work week. These are long-term structural decisions about the position, and you should not make them solely on the basis of the salary of the person who happens to hold the position today.

If you have a small group of very senior salaried employees (e.g. a GM in a larger hotel), it is reasonable for them to not track time. We do recommend, however, that you have all employees up to a certain level (e.g. department managers in larger hotels or probably all managers in a small select service hotel) universally track their work hours.

Consider alternative means for a manager to track hours. For customers who use the Hotel Effectiveness Time & Attendance system, we encourage you to have your managers use our internet based Webclock system. This avoids a situation where managers are standing in line with employees waiting to clock in and out.

After gathering this important data, you can then decide what actions you want to take in order to stay in compliance with the new overtime ruling. Be sure to stay tuned for our next blog – we’ll provide you with a few helpful options! Want to be the first to know? Sign up here for early access!

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