Overtime Regulations

Last Updated: Oct 8, 2019

The Issue

On September 24, 2019, the U.S. Department of Labor (DOL) issued a final rule to update the regulations governing which employees are eligible for overtime pay. Today, employers are required to pay overtime for all employees earning $455 per week or $23,660 or less per year. Under the new rule, which goes into effect on January 1, 2020, that salary threshold will increase and require businesses to pay overtime for all employees earning $684 a week (or $35,568 per year) or less. This new rule replaces the rule issued by the Obama DOL in 2016 which was ultimately struck down by a Federal court. That rule would have more than doubled the threshold and set up automatic updates every 3 years. NACS opposed that rule and suggested an update similar to what the Trump DOL has now issued.

Retail Impact

Labor costs are the highest single operating expense for convenience stores. It is appropriate for the government to adjust the overtime salary threshold, so it remains relevant in the current marketplace. This adjustment is in keeping with previous updates and is in line with existing salary level increases in the conveniences industry since 2004.

NACS Position

NACS largely supports the new overtime rule. The DOL followed most of the suggestions made by NACS and other business groups in our formal comments on how to appropriately update this important rule.