May 18, 2016

MAY 18, 2016 – ARLINGTON, VA – Food Marketing Institute (FMI) shares the following statement on today’s release of the Administration’s final overtime rule, which will have significant operational consequences for how food retailers structure their businesses and pay their associates.

Jennifer Hatcher, FMI chief public policy officer, senior vice president of government relations, stated, “As the association for the nation’s grocery stores, we agree that an increase to the salary threshold was warranted, and we appreciate the Department of Labor for not imposing changes to the ‘duties test,’ which would have been devastating. However, we still have significant concerns with a number of changes included in the final rule that will have serious scheduling and financial impact that could drive up costs and product availability.   

“While we appreciate DOL extending the implementation beyond the 60 days in the proposed rule which was unworkable, many of our members will still have significant scheduling and budgeting challenges implementing a rule that doubles the salary level in less than 7 months, on December 1 – during the busiest shopping season of the year.

“We recognize that DOL’s modest concession on incentive pay now allows our industry to utilize incentive pay to account for up to 10% of the required salary level provided that it is paid on a quarterly basis.  This is a change from the proposed rule which required monthly incentive pay – a practice not done in our industry due to sales fluctuations.  However, we are still concerned that the rule will negatively impact the use of incentive pay – a tool that is effective and popular with managers and supervisors to recognize their achievements.

“Most immediately, FMI members will need to familiarize themselves with the changes, analyze the financial and scheduling impact and determine how best to comply.”