November 2023 update from Joe Trauger from the National Club Associations.
We chat about the Championship Conference and the ripple effects of labor regulation changes on the industry.
Then we dissect the potential ramifications of the Department of Labor's proposed hike in the overtime threshold. Gain a firm grasp on how this proposed shift could impact both employers and employees and unravel the complexities of the Fair Labor Standards Act along with an influential court case from 2016. Stay tuned as we navigate through the H2B visa program and its implications for clubs and managers.
Learn more about the National Club Association here.
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Hey everyone, welcome back to Private Club Radio. I'm your host, denny Corby. Here we are getting a quick update again from our friends over at the NCAA National Club Association. They always have some cool things going on and trying to help our industry and that's this. All that sort of a lot more on the political side and I will be honest, I am the far from knowledgeable on that subject. But I try to make it a little bit easier ask the questions, ask to break it down, make it sound, make it a little bit fun and interesting, because it can't, it's sometimes not always the most interesting subject. We chat about the club championship conference coming up. That's going to be a lot of fun. I'm excited to go learn, hang out and just make some connections and that's what all these are about. That's not always the topic or subject that you might need or at the moment, but I think it's just fun to go and learn. That's what me and Joe talk about, with the NCAA a little bit coming up with their events and conference next year. Going over to the political side, we talk about the Department of Labor in their threshold to go from salary to hourly. Joe will talk about that a little bit more, since he is a lot more knowledgeable and can explain it a lot better, which he will but talk about the goods, the bads, the pros, the cons, when it takes effect, how it takes effect and for you all as listeners, depending on what side of the spectrum you are on, whether it's management, if you fall within the threshold, know how to have those conversations from both sides of the playing field and how to be proactive about it. So something that's going to be happening, whether we like it or not. We also touch on the H2B visa program, which has to do with workers coming over on visas. That's going to be in our chats. And I totally forgot to mention coming up on our 300th episode. Head on over to privateclubradiocom. Sign up for our 300th episode giveaway giving tremendous prizes, many, many prizes, some really cool things you want to be entered in. Make sure you head on over to privateclubradiocom. You'll see the link. You'll see it right there, right on the main screen. Sign up, register to win one of those things. You'll see what I mean You'll see a prize emoji. You're picking up what I'm putting down. Anyway, enough of me speaking. Let me pass it over to the man who knows a ton more than I do about everything. I just tried to say the big cheese at the NCAA, Joe Trager. So what is going on? How are things?
Speaker 2:Things are going great. We've got a new conference coming up next week and really looking forward to I'm going. We're looking forward to seeing you there and looks like we have a good group assembled. This is our inaugural championship club conference and we have some fantastic speakers lined up. We'll kick things off. I will kick things off right away in the morning. I'll be joined by Tom Wallace, who's with Copeland, kevlar and Wallace and also a board member of the National Club Association. We'll just set the tone, what our goals are for the conference, and then we'll kick things off with some good discussions from Colin Burns, who's the former general manager at Winged Foot up in New York, and also we'll have Kevin Bozada, who's the director of club operations at Augusta National Golf Club, and Robbie Zalsnack, who is a former player services person with the US Golf Association, usga, and we'll cap things off from the day with Jeffrey Creeful, who's the general manager of Congressional Country Club. So a fantastic lineup of speakers and we're just going to talk about all those things that go into putting together a golf tournament at an elite level. So anything from a state amateur championship to the Masters or the US Open or PGA or PGA event or an LPGA event. Yeah, so it's going to be a great, great conference. I'm excited about it. I know it's caused the buzz within the community and, yeah, we're looking forward to kicking this thing off and building it to be even bigger and better next year, so, but we got to get this first one off the ground first.
Speaker 1:I was going to say, man, high expectations for next year and this year's not even done.
Speaker 2:This is great yeah that's what I Go ahead.
Speaker 1:Go ahead guys.
Speaker 2:No, I agree. I mean we're excited about it and you know, having speakers like that at our first event is a high bar to match. But yeah, we're looking forward to trying to do that and make it even better for the next, next go around. So, but we need to get through this one first, and I'm excited about what we're going to learn.
Speaker 1:No, it's really. I really enjoy niched down, more intimate events, and that's what this seems to be, because it was only limited to 100 people, or was it 50?
Speaker 2:Yeah, we originally limited the attendance, yeah, but it looks like we'll have about 25 or 30 people there. So it's a good. It's a good group and it should facilitate some good conversations and and you know talking about challenges and how to resolve them and ideas. So we're looking forward to the conversation.
Speaker 1:Well, and what I think is interesting too is, even if I think the perks of going and this is me just like, I'm not even even selling it, it's just from, like the point of view of just it's not about you know, it's about learning about that specific thing. But I think the fun part is if you can go and like, let's just say you're not interested in doing you know anything closer, re remote to that. But if you go and it's you just learned, like, oh, that's how this large thing handles this specific problem, you know, whether it's food and beverage, whatever, they can take that back and go. Oh well, if they can solve it like that with this large everything, I can easily probably incorporate that into my you know small thing. So I think it's just you know seeing and relating and, like I said, how small and intimate just having you know those conversations and I'm sure it might turn into you know fireside chats a little bit. So I'm super excited.
Speaker 2:Yeah Well and I think the lessons folks can take away from a conference like this really go beyond that elite level tournament that we're really kind of focused on. Because you know, every club that has golf will do member tournaments, whether it's a member guest or a member member or their club championship or, you know, chairman's cup, whatever it is, and there's little things that clubs can do to make those events really special for their members. And you know, being able to learn from an environment like this and the things that folks do for the elite players again, whether it's PGA, lpga or you know any other tour, you know they can bring those things home and make it extra special for their members. And one of the things that we really wanted to get at here. You know we made this conference available to not only the professionals, the general managers and head pros and that group, but we also opened it up to board members because really, at the end of the day, you know if a club decides that they're going to host a championship, you know at whatever level, the board's really the one that makes the decision to hand over their course or, you know, one of their courses in their facility to that tour for holding that event and so by learning about what exactly that entails, board members can make a more informed decision about, you know, whether or not they want to hand over their facility for a week and everything that goes into it, whether it's course preparation and you know all those. There's so many things that go into these types of events that you know we're really just scratching the surface with this initial event and kind of doing fraud strokes on the whole whole package. I think where we have opportunities in the future is really kind of dig down deeper into these things and those little extra special things that clubs can do to, you know, make the players that are arriving for the week, you know, feel at home and have a great experience and, like I said, those things translate into how you can hold tournaments, you know, at your club, even just for members. So there's a lot to learn from it and I keep saying it, but I'm really excited about to see how things go and like, is that planning for this to be a recurring event on the calendar?
Speaker 1:And I think what's awesome as well, and what the theme I'm getting away from, is, you know also the connections and the networking this is going to have, because you know, let's just say you have a, you're working on something and it's just you know your own small club event but you're hanging out with so and so and they happen to have a connection to you know a sponsor or something. I just think that's oh, it's going to be so much fun. I'm so excited, the potential.
Speaker 2:Yeah, that's one of the things that we try to do for all of our events is really have a kind of curated experience and be able to foster that networking connections, whether it's, you know, an event like this or our National Club conference that we do in the spring every year, the events are really meant to be prime opportunities for networking and just getting together and having conversations and being in community. You know I've said in the past the National Club Association is not unlike a club in the sense that you know we're building a community and we learn from each other and you know it's nice to be in that community for an event and socialize and learn.
Speaker 1:I will say I attend a lot of conferences in different capacities and what I really enjoyed for my first time at the NCA conference last year was how everybody and everything is in the same room and to me, from my point of view, just looking and observing, I feel like this creates such a better bond and connection with not just the attendees but also the sponsors and vendors who are also in the same room. That opens up. You know, it's about the connections and the people, and just having everybody in the same room, I just think, opens up the doors of communication to where hopefully, the sponsors and the people you know supporting and doing things are also paying attention to what's being talked about. I think it just opens up the doors of conversation. So now, when you know we all have that awkward like walk, walk by a booth or just standing there and not sure what to do, it just opens up like, oh, wasn't that a cool idea? And it's like, oh, yes, at least it just opens up the doors of communication. I really enjoyed the connection, yeah.
Speaker 2:I agree 100% and that's why we can. You know we were going to continue that tradition and it's it also opens up, I think, an opportunity for vendor sponsors to hurt here firsthand. You know the things that the club professionals are talking about and what they might be concerned about, and so I think that's a benefit for our sponsors and vendors as well to be in the same room and that's like I said, it's been a tradition and it's something that we're definitely going to be continuing in the future. You know we have our conference scheduled at PGA Frisco down in Texas next April 28th through the 30th, and you know we're in the process of putting together the speakers and events and all that kind of stuff. But yeah, I think we're going to try some new events this year, or next year, I should say, and I think it's going to be fun.
Speaker 1:I'll be totally honest, that's sort of the reason why I'm coming to the championship conferences. I know I'm never, ever going to host a club, but just to go and just, you know, understand the little intricacies and little detail to make. Oh, I never realized that's what goes into it, or that's. That was an interesting problem. What a crazy solution. Just understanding and hearing the stories in the point of views and perspectives, absolutely.
Speaker 2:And I've been in the, so I've been in the board room at my club. You know, served as a board member for eight years, president for two and you know, almost every year there would be a request from the Virginia State Golf Association or some other organization that wanted to host an event or a qualifier or something like that. And a lot of times I think board members go into it not knowing exactly what that entails for the club and in terms of the staffs and you know the management, so you know that's again kind of why we wanted to offer this up for board members as well, so they can have a clearer window into exactly what that decision means. I like it.
Speaker 1:I like it a lot. What is? I know we were last episode. A few episodes ago. We were talking about the Department of Labor. What's what's going on there?
Speaker 2:So, while we're taping this, on November 7th and it is an important day because November 7th is the filing deadline for comments to the Department of Labor on the overtime threshold and just by way of just a brief background, the overtime threshold is that minimum amount that you need to pay someone in their salary or wage in order for them to be even considered an exempt employee, and you know there's duties, tests that come along with that. You know, are they acting independently? Do they have autonomy? Those types of things? Do they supervise staff, those types of things. So the last time it was updated was 2019 and it went up to $35,568. And the Department of Labor has put out a proposed rule to increase that threshold up to $55,000 and change, and potentially up to $60,000 and change. So we actually filed our comments yesterday with the Department of Labor and we urged them to withdraw it, because it's RBU that it's going to have a negative impact on not only employers and clubs, but also employees who might be on that bubble where they're considered exempt now and they have a lot more autonomy, they have the opportunities for continuing education, certification, those types of things where, if they become an hourly employee and not exempt, it becomes much more difficult and, frankly, much more expensive for clubs to invest in those key, really crucial continuing education certification programs. So we highlighted that as an issue. But it also has the potential for creating the exact opposite effect the Department of Labor is trying to get at, which is offensively. What they want to do is increase worker income where if you have an employee who's on the bubble, but say the golf professional who earns commissions on lessons that he or she provides, it's their salaries let's say for a median club or club professional assistant club professional would be, say, $40,000 base salary. They might earn $5,000, $6,000 in commissions over the course of a year under the rule that that employee is now going to be non-exempt or would be non-exempt, meaning that the club would. Then really, because they're trying to keep a pretty firm handle on labor costs, the club now is going to be incented to limit that person's hours to avoid paying overtime. What that does in turn is it limits the number of hours that individual is able to schedule lessons and during the seasonality and whether dependency of whether it's golf or rackets, those types of things that can diminish their earning capacity, because it just limits the number of hours that they're available to give lessons and earn those commissions. There's some concerns about that and we made those clear. One other aspect that we raised in our comments was that the Department of Labor wanted to move to a automatic update every three years. So every three years they would increase presumably increase the minimum threshold for overtime exemption and really, basically, what we said to them was that you know, to our beliefs that that's outside of the law, they're not authorized to do that under the Fair Labor Standards Act and they should not do that, and so, hopefully, you know, cooler heads will prevail and wisdom reigns and they'll pull that back. But you know, there's really no organic, you know authority for them to do that in the statute. So, again, we're hoping that they'll pull that back, but at the end of the day, there's also some concerns about whether or not they're going beyond their authority to increase the overtime threshold as much as they are, as fast as they are. There was a court case a federal court back in 2016 that ruled under the Aboled Administration that they by increasing, they wanted to increase it up to 47,000. But what the court said is, by increasing it so much up to a high level, effectively what they're doing is getting rid of the duties test, which is beyond, again, the confines of the Fair Labor Standards Act. So there's a lot of different movie pieces in here. There's litigation that I'm sure will be involved once this is finalized, but we made it clear that we opposed the rule as it was proposed and urged them to withdraw it.
Speaker 1:When would this take effect?
Speaker 2:So right now they're in the comment period which closes today. So what they'll do? The agency will take all of those comments. I forget how many there were filed. There were in the thousands that were filed comments. So what they have to do under the Administrative Procedure Act is they have to review those comments, respond to those comments and then finalize the rule. And then there's a process they go through there, they go through the OMB or the White House to have them review the final rule and then it's published.
Speaker 1:So it should be done by Friday, yeah.
Speaker 2:I'm sure they would love to get it done that quickly, but there are steps that they have to go through that take some time, and so I think it's just it's tough to say when the final rule would be out, but I'm pegging right around February or March for a final rule, just given some of the things that they need to do to get to that point. And there's a little bit of pressure on the administration to get it out sooner because of what's known as the Congressional Review Act, and that is a process that Congress can review any rule. And it becomes particularly precarious for an administration as it nears the end of its term because we have an election coming up 2024. And if the administration does not win reelection and the Congress is of the opposite party, it makes it much easier for them to pass the Congressional Review Act, meaning they would essentially strip all of the regulations or certain regulations out and rescind them. So there's a little bit of the calendar coming into play here and I'm simplifying the process for obvious reasons, but because it's never that easy. But yeah, there's a lot of different things happening and a lot of things that they're trying to avoid, and I think that's something we're going to see not only within the Department of Labor, but it's something we're going to see across the administration, to get these rules done around that February, march timeframe. Get them finalized.
Speaker 1:So either CMA conference will be a total party in Vegas or not. No kidding, are there any like it seems like there's. Like a lot of you know this is not a good thing. Are there any or not? Not a yeah, are there any good things Like are there any pros to this? You know, let's just say, you know this, this does get passed, you know, are there any pros to look for? You know how is this, or could it be beneficial, if anything?
Speaker 2:Well, it depends on your perspective. I suppose the administration, the Department of Labor, has said that they anticipate about 25% of how did they say it? There was some number of individuals that would then become eligible for overtime. So presumably there could be some individuals, some workers, who do actually see an increase in their wages. We could see some reclassifications going on where individuals who might be just below that threshold, they get bumps, they're above the thresholds and keep their exempt status. But at the end of the day, it's a very difficult decision because it forces the employer to either promote or demote an employee. And you think about early in your career you were a salaried employee, you had responsibilities, it gave you the autonomy to be able to do the things that you needed to do in order to get the job done, whereas simply by having an income threshold that's that high, effectively you get demoted and you become an hourly employee. So now you've got to punch the clock, you've got to watch it like a hawk for overtime so that the employer doesn't want you to go into overtime because that disrupts their budgets. So I would say, from a business standpoint, there's a lot of downside to it, particularly if we get into a situation where they do actually do a three-year update, because essentially it puts you on a merry-go-round Every three years you're going to have to reclassify employees and look at the wages, salaries and see where they're at in relation to what the new thing is, whereas typically it's been done on a periodic basis, so it allows some time in between for things to settle before you actually have to go through that process again. So I think from an employer standpoint there's more downside than potential upside.
Speaker 1:Regardless of what's happening and whatever perspective you see, is there a way to prepare? So, for example, from both sides, is there a way from a club, maybe a little bit on that threshold, or potentially, is there a way for them to prepare, because it looks like, it sounds like we have like three, four months-ish five. So is there anything from that person on the bubble perspective and then also from a higher-up management perspective, how can both sides prepare?
Speaker 2:Yeah, I think clubs. Obviously we have an idea of a range of where that threshold is going to be. Typically, what happens when they update these thresholds is they propose a rule with a number. This time, what they did was they proposed the rule with a range. Like I said it remember it's anywhere from 55,000 to 61,000. So we don't know exactly what that number is going to be. But for preparation purposes, if I'm a club, what I'm looking at is who are my employees that are between $35,568 and that $61,000 threshold that's in the proposed rule, and what's my plan for? Yes, the rule does get finalized at that level. How am I going to classify them? Am I going to increase their salary to get above that threshold or am I going to effectively demote them and make them an hour of the employee? So that's really those individuals that are as employees, that are in that window, are really where employers need to focus. And of course, there's a follow-on effect, because if you have somebody who you want to have as an exempt employee but they might be earning $40,000 or $45,000 and you bump them up to $60,000, now you have other employees that may have been at $60,000 or $61,000 or $62,000. And now they might be affecting an increase as well, because you get into equity situations in terms of your employees. So it's something that you really need to sit down and go through strategically and look at how it affects other employees that may not even be affected by that threshold. So it is like I said before. That's why we want to avoid getting on the merry go around every three years, because it's not a simple process and it has implications that go beyond just the employees that are affected by that individual threshold. What clubs and managers need to do is again look at the individuals that you have in those salary ranges between $35,000 and $61,000, and where do they sit within the overall structure of the management of your club. Look at it from. Obviously there's budgetary implications, there's managerial implications how do they fit within your structure? And figure out okay, if it's $61,000, how do I want to classify that individual? And then I think what you need to do is start having conversations with your employees and talk to them about the changes that you're being forced to make, because these are not things that you're doing voluntarily. You have to do them under the Department of Labor's regulations. So that just kicks off a lot of conversations that managers are going to have with their employees that are within that range For employees. It's sort of a situation where you just have to see how things shake out.
Speaker 1:There's not really any. Go and start that conversation. If you're in the management position, starting to look at it and have those conversations with those people, and if you are on that bubble, then it's having that conversation and being proactive in going to the manager or whoever and going hey, I heard about this thing, what are we doing here?
Speaker 2:Yeah, Right, yeah, I mean, and that's. I definitely would encourage folks to have that conversation if they're in that position.
Speaker 1:Well, and it's hey, talk to your spouses and what are their companies and employees doing also? Yeah, it's a big, very powerful fact.
Speaker 2:Yeah, it is going to affect a lot of people.
Speaker 1:Anything else going on for November in terms of anything in your neck of the woods?
Speaker 2:What's happening in Washington in November? Lots of stuff. We know we're still in the process of trying to figure out how the government's going to be funded. House Republicans met this morning to talk about that and their approach. The Senate is basically going to jam the House and pass a continuing resolution and the House is going to have to figure out what they want to do. So, yeah, we're in for some interesting times because the government, if they don't get a deal, shut down in 10 days on November 17. So we're back into the frying pan, as they say.
Speaker 1:I feel like we're in an episode of Parks and Recreation. I don't know if you're a fan of that show, but the government shut down and it was just funny yeah.
Speaker 2:It seems like we jump between the frying pan and the fire. Fire gets a little hot, jumping in the frying pan, jump back into the fire. So yeah, we'll see how things play out. But we have a new speaker and he's got a challenge ahead of him. The administration just announced that they're adding 64,000 supplemental H2B visas. So we'll get a word from them on how they're going to allocate those. So that's a development. What does that mean Just recently? So the H2B program is a program for, essentially, guest workers from outside the US to come in on a seasonal basis, so whether it's the first part of the year, the second part of the year, and yeah, they fill jobs from anywhere from back of the house green, keeping front of the house, wait staff so it's a way for clubs, a program that clubs use to supplement their workforce every year, and would that also apply?
Speaker 1:I'm just ignorant, I just don't know anything. Would that also apply to management positions and GM positions? Would they also need that particular visa? No, okay.
Speaker 2:No, no, this is really for the essential worker skill level Gotcha. So management would be a different kettle of fish.
Speaker 1:So that person, if they were a killer, wouldn't be able to necessarily move up though with that particular visa. They would have to stay just firm.
Speaker 2:No, they're approved for a particular job, gotcha. So, hmm, yep, but it's a big program, it is an important program for clubs, and so it's something that we keep an eye on. And there's some possibility of some changes to the H2P program within the confines of the statute, but it's unknown at this point, given where things are at with your appropriations process, because if anything were to happen, it would be on the appropriations bill that looks through.
Speaker 1:And when would that happen and what's the timeline for that?
Speaker 2:Well, it's all wrapped up in the discussions on how the government funds itself, so we'll have more clarity when they figure out how they're going to do the continuing resolution and or permanent fundings for the various agencies. It'll be, interesting. I wish I had a better answer.
Speaker 1:I get it. No, I mean, it sounded good.
Speaker 2:It's often the case as often as the case, it's the government, so we don't always have great answers.
Speaker 1:So hopefully by like Friday.
Speaker 2:Well, a couple of weeks. Yeah, that's a couple of weeks.
Speaker 1:No, we'll give them some time. Give them some time. All right, sir, it is November 7th. I will see you soon at the championship conference, excited to come down and learn everything there and report them back on it. But you have a fantastic day. Thanks, hope you all enjoyed that. I love talking to Joe, such a good guy. And over to nationalcluborg to learn more about the NCAA if you don't know about them, and or championship club conference. They're a good group of people. Hope you all got some nuggets, some information, enjoyed the content, if you did. Please share with somebody, follow, subscribe. It helps more than you know. It's not. Goodbye, until next time. Catch you on the Libby Difflet. I'll see you on the對了 in the쳤.