Retailers already facing minimum wage increases across the country are now also facing new federal overtime rules that may further affect their labor costs.
As if cultural shifts in consumer preferences and buying habits are not enough to deal with on the top line, the new labor policies pose additional challenges on the bottom line.
Currently, salaried workers who make $23,660 or less are eligible for time-and-a-half overtime pay if they exceed 40 hours a week. Starting Dec. 1, 2016, the salary threshold will nearly double as workers who make $47,476 a year or less will be eligible.
Specialty retailers in traditionally low-cost areas, such as the South and Midwest, will be affected the most as their assistant managers and managers will likely qualify for overtime. These retailers typically have smaller store footprints and lower volume, and their assistant managers and managers often make below the new threshold.