In 2018, the U.S. health club industry pulled in $32.3 billion in revenue. This success is primarily thanks to the people in this industry, from owners to front desk staff, who are dedicated to improving the health and well-being of people of all backgrounds and abilities. But your club's future revenues could be at risk due to the Department of Labor's proposed changes to current overtime regulations that could affect the way your business operates.
The Current Law
Under the current law, employees working more than 40 hours per week are exempt from overtime if:
- the DOL would classify the employee as white-collar if the employee is salaried making $23,660 or higher.
The Proposed Changes
Two of the DOL’s proposed changes include:
- raising the minimum salary required for an employee to qualify for overtime exemption from $23,660 to $35,308 per year
- increasing the total annual compensation requirement for “highly compensated employees” from $100,000 to $147,414 per year
As a club operator, you may wonder how this could affect your bottom line. Well, it might end up saving you money to just give your employees raises.
“If the regulations are approved, then a manager or supervisor paid between $23,660 and $35,308, who would be otherwise eligible to be exempt from overtime pay for hours worked over 40, would have to be paid overtime for all hours worked over 40,” says Helen Durkin, J.D., IHRSA’s executive vice president of public policy. “If an employee is close to the new proposed threshold and routinely works over 40 hours, then it might be less expensive to raise that employee's salary.”