White Castle VP sounds off about overtime pay regulations

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White Castle VP sounds off about overtime pay regulations

White house unveiling new regulations expanding overtime pay for workers

This is a rush transcript from "Your World," June 30, 2015. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Well, let's just say, on these developments, about forced overtime, et cetera, my guest is a little bit more than just overfried.

Jamie Richardson, vice president over at fast food chain White Castle -- he's obviously not eating their food, but anyway.

(LAUGHTER)

CAVUTO: What do you make of this? You don't like the fact that the restrictions are blatant and over the top and for everybody.

JAMIE RICHARDSON, VICE PRESIDENT, WHITE CASTLE SYSTEM, INC.: Yes, this is a one-size-fits-all mandate in many ways in terms of trying to have something from Washington, D.C., tell us how to serve our customers in our neighborhoods.

And it impacts our general managers the most.

CAVUTO: How so?

RICHARDSON: They're the hamburger heroes who make it possible for us do to so much in our neighborhoods. This would really affect them in terms of what the limits are. And they love the flexibility of being able to work as many hours as they like. We give them that flexibility.

CAVUTO: But wouldn't they like the idea of overtime pay up to -- we cut it off around $23,000 -- if it goes all the way up to $53,000, $54,000?

RICHARDSON: White Castle is a family-owned business. We can't budget like they do in Washington.

This would cost us $8 million to $12 million a year if we didn't make any adjustments. And we know...

CAVUTO: So you would have to adjust their schedules accordingly?

RICHARDSON: We'd have to find -- we would have to make tough decisions.  And we already invest in a great retirement benefit, a bonus plan and a great health care plan. So this would really force us to have to look at everything.

CAVUTO: I was thinking with your coming here, we have had this set level for when overtime kicks in. But it's not been adjusted for a long time.

So a lot of people say we have got to adjust it and then maybe index it to inflation. Would you be open to that, or do you think this is too dramatic, and like hiking the minimum wage, essentially trying to double it, it's too big, too much, too soon?

RICHARDSON: This is way too much too soon.

And we were hoping for a thoughtful approach. What we have seen today is very concerning. There is a comment period. We are hopeful that there will be more listening and more thoughtful dialogue. But this is not good for our neighborhoods. It's not good for our team members, not good for our customers.

CAVUTO: What about your customers? Would they be willing or have you seen them willing to pay more for a burger or fries or a shake or whatever as a result?

RICHARDSON: Well, it's a hot and tasty White Castle, so you always might be able to pay a little bit more.

CAVUTO: Right.

RICHARDSON: But we know our customers are hurting too. Hardworking Americans are struggling to get back on their feet still and they come to us for hot and tasty, affordable food that they can enjoy. So, we can't just pass that along.

CAVUTO: So when you hear the president say the improving economy and the boom that we have been seeing in the markets, recent days notwithstanding, is the wind at your back, and you shouldn't be so cheap, you say what?

(LAUGHTER)

RICHARDSON: The best things we have seen have come from our neighborhoods, from our team members and customers, not from Washington, D.C.

CAVUTO: So, what do you do?

RICHARDSON: We keep the faith and we keep sharing the truth and hopefully common sense kicks in, and we're able to do this in a way that is good for everybody, including the opportunity for these general managers to have the flexibility to work the hours they want to, to make the impact they want to.

CAVUTO: But I was thinking of you, Jamie. You must be doing something well, though, because let's say you were hit with the minimum wage thing.  You were no fan of that. You were hit with a lot of added rules and regulations for health care. You more than survived that.

Now you have got the mandatory overtime thing to complete the hat trick, I guess. But you're firing on all cylinders. So explain that to those who want to slap you down, because you're not down. You're actually doing quite well.

RICHARDSON: Well, we're thankful that we have incredibly loyal customers and team members that make that possible.

But the day the Affordable Care Act was passed, we had 418 restaurants. Today, we have 391.

(CROSSTALK)

CAVUTO: ... on the act, the Affordable Care Act that did that?

RICHARDSON: There's a lot of ever -- all the factors. Affordable Care Act is one of them, the great recession, all these rules and regulations.

When you go camping, everything weighs something. And it's the same with these costs. Restaurants tend to operate on tight margins. About $750 is profit per employee, compared to $10,000 for most businesses. So every dollar counts and we have to invest wisely.

CAVUTO: So if you can't legally fight this, you're saying you're just hoping that a different president, maybe a different administration would change this?

RICHARDSON: I think retailers and restaurants everywhere are going to put our best foot forward and share the truth and hope that common sense prevails.

CAVUTO: All right. Maybe if you serve more arugula stuff, you would be on -- you would be fine. But you don't do that.

(LAUGHTER)

CAVUTO: Jamie Richardson, a very thin and fit V.P. over at White Castle System. I'm suspicious of this.

(LAUGHTER)

RICHARDSON: Any time, Neil.

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