Overtime Regulations
Many convenience stores rely on overtime exemptions for managers and certain assistant managers, allowing them to avoid paying overtime rates to those employees. A dramatic increase in the salary threshold may make this difficult if not impossible to maintain and possibly result in much higher labor costs for c-store operators.
The Issue
In 2024 the Biden Administration released its updated Overtime rule which sought to make dramatic changes to the salary thresholds under which all salaried employees must be paid overtime wages. Under the new rule, on July 1, 2024, anyone making less than $844 per week ($43,888 per year) would have been required to be paid overtime pay for any hours worked beyond 40 in a given week. On January 1, 2025, that threshold was scheduled to increase to $1,128 per week ($58,656 per year). NACS and others sued to stop the rule and a Federal District Court in Texas invalidated the rule. The U.S. Department of Labor has reverted enforcement to the threshold set forth in 2019 of $684 per week ($35,568).
Retail Impact
Labor costs are the highest single operating expense for convenience stores. It is appropriate for the government to review and, if necessary, adjust the overtime salary threshold, so it remains relevant in the current marketplace. Unfortunately, the rule the DOL put in place in 2024 completely upended that process by changing the methodology it used to make this determination. That made the rule inappropriate for various parts of the country and undermined the proper notice and comment process for such rules.
NACS Position
NACS opposed this 2024 overtime rule in court and won. NACS will continue to work to support the District Court decision in that case.
