An MRA delegation will be in Washington, D.C. on April 12 and 13 to speak with members of Congress. The Washington trip is part of the National Restaurant Association’s Annual Public Affairs Conference. The 2016 MRA group will include eight of your fellow members, with over 100 years combined experience speaking with federal lawmakers about issues of importance to the restaurant industry. Among the issues on their minds this year, are the following.
Overtime pay for salaried employees
In March 2014, President Obama issued a memorandum to the U.S. Department of Labor directing an update to the regulations defining which salaried employees are eligible for overtime pay. The purpose of the directive is to sidestep Congress on the way to implementing a change in federal overtime law.
On July 6, 2015, the DOL issued a Notice of Proposed Rulemaking dramatically rewriting the current federal overtime regulations by, among other things, increasing the salary threshold to be considered exempt from overtime pay to $50,440 annually – a 113 % increase over the present $23,660. Interested parties were given sixty days to provide written comments, which MRA did.
In mid-March of this year, the DOL’s final rule was forwarded to the Office of Management and Budget. If the OMB adheres to its usual review timeline, the final rule would be approved by mid-May. It is commonly believed the final rule will not deviate substantially from the proposed rule and will likely become effective sixty days after release by the OMB. Accordingly, employers should plan to be in compliance by mid-July unless publication of the final rule can be delayed.
Toward that end, MRA will ask Congress to support the Protecting Workplace Advancement and Opportunity Act recently introduced by Senator Tim Scott (R – South Carolina) and Representative Tim Walberg (R – Michigan) that would require the DOL to conduct an economic impact analysis before approval of the final rule by the OMB. MRA worked in partnership with the National Restaurant Association to have this important legislation introduced.
I.R.C. section 45(B) FICA tip credit
Authorized by Internal Revenue Code Section 45B, the FICA tip credit equals the amount of the employer’s portion of social security taxes (currently 7.65%) on tip income not used to bring the employee’s wages up to the minimum wage. For purposes of calculating this credit, the minimum wage is capped at $5.15 per hour – the rate in effect at January 1, 2007.
As Congress proceeds with plans for meaningful tax reform in 2017, it is essential that the existing 45(B) credit is maintained in the tax code. The credit is good public policy. It encourages more accurate reporting of tips for FICA and income tax purposes.
The credit is a critical component of the financial success of a restaurant. Without the credit, which reimburses a portion of the payroll taxes the employer pays on income tipped workers receive from a third party, restaurants would bear an unfair amount of employment taxes. Americas restaurants must operate at an acceptable level of profitability if they are to continue to create jobs and ladders to the middle class for Americans.
Representation before Congress as part of the NRA Public Affairs Conference is but a part of MRA’s mission of service to the restaurant industry in our state. And another terrific example of your MRA membership dues at work.