NCCR Files Comments on Proposed Revisions
to Overtime Exemption Regulations

Washington, DC, June 30, 2003 - The National Council of Chain Restaurants (NCCR) filed comments today in support of the Department of Labor's proposal to revise and update the overtime exemption regulations under the Fair Labor Standards Act (FLSA). The 90-day comment period on the proposal, first announced on March 31, closes today.

"The existing overtime exemption regulations are outdated, complex, and have little, if any, applicability to today's modern workplace," said NCCR President Terrie Dort. "An overhaul of the regulations is long overdue, and the Department of Labor should be commended for finally undertaking the challenging task of bringing the regulations into the 21st century."

In recent years, the chain restaurant industry, like other labor intensive, service sector employers, has been confronted with numerous class action lawsuits based on claims that restaurant managers and/or assistant managers were improperly classified as exempt from eligibility to receive overtime pay. The outdated nature of the regulations has created great confusion for employers regarding which employees are exempt from overtime. This confusion has led to a dramatic increase in wage and hour litigation, which in any given year now outpaces employment discrimination lawsuits.

"The new minimum salary level, which more than doubles the existing salary required to be an exempt employee, could be an impossible hurdle for many employers located in non-metropolitan areas of the country where salaries, and costs of living, are lower," Dort said. "However, all in all, we believe the update is absolutely necessary to re-orient these regulations, which were written for a 1930's-style manufacturing-based economy, to today's service-based economy. Hopefully, the final regulations will bring new clarity and certainty to employers and employees alike so that class action litigation can be avoided," Dort concluded.

The National Council of Chain Restaurants (NCCR), a division of the National Retail Federation (NRF), is a national trade association representing forty of the nation's largest multi-unit, multi-state chain restaurant companies. These forty companies own and operate more than 50,000 restaurant facilities. Additionally, through franchise and licensing agreements, another 70,000 facilities are operated under their trademarks. In the aggregate, NCCR's member companies and their franchisees employ more than 2.8 million Americans. For more information about NCCR, visit www.nccr.net. For more information about NRF, visit their web site at www.nrf.com.