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 EXECUTIVE DIRECTOR'S MESSAGE: GREETINGS & SAL-UTATIONS! 

OIL PRICES, USDOL FOLLOWUP & MORE

Being right isn’t always a good thing.  That’s especially true when it turns out that being correct still ultimately means trouble for so many of our members and the public.  Yet, that’s exactly the way I feel as I’m typing you this message because the price of gasoline is on the rise once again.  

As swell-headed as that sounds, I can’t say I didn’t see this coming.

Of course, I’m referring to the recent splash that President Obama made when he said the federal government was going to be playing in the market in an attempt to affect the price of gasoline.  Following the President’s announcement to release oil from the Strategic Petroleum Reserve and after only a few weeks of trading, the oh-so-significant-drop in oil prices has been completely undone.  It’s as if the President never announced the initiative and those 30 million gallons of light sweet crude didn’t even make a blip in the market.

Yes, sometimes I hate being right.  Where’s my proof?  The President announced his plan on June 23rd.  The market responded almost immediately as prices dropped – only to rise sharply in the last few weeks.  In fact, according to OPIS, the price of gas at the rack has increased by 31¢ since June 25th – two days after the President announced the initiative. 

Obviously this is bad for consumers and bad for small business owners who still face high pump prices after the government’s artificial intervention in the market completely flopped.  What’s even worse is that the government will now have to repurchase those 30 million gallons of crude at a higher price, costing taxpayers even more!

Back in April when pundits were calling on the President to release oil from the Strategic Petroleum Reserve, I authored an Op-Ed that warned President Obama not to release oil from the SPR.  It has been published in a few papers including the Asbury Park Press and the Philadelphia Inquirer as well as some statewide online news sites and a handful of local papers.  You can read my Op-Ed HERE

As I’ve said many times before, the government has no business mucking in the market.  When it does, it acts for political reasons and not for economic reasons.  This entire situation is only the latest example of this and you’re no better off for it. 

Looking at the market, it’s anyone’s guess how things will pan out.  However, the raw data says that demand is below where it was a year ago, with very little movement.  Supplies are still stable, though the price of crude is rising.  While ‘normal’ economic cycles would dictate that these conditions would see prices plummet – especially during a difficult economy – it hasn’t translated to the street. 

Though we monitor these numbers constantly, we can only believe that the ‘new normal’ is going to be sharp spikes and sharp dips in prices.

As always, I encourage you to maintain as high a margin as possible in order to keep your operations running profitably.  I know that competition will ultimately squeeze your margins, but just remember, if your costs go up, they’re going up for everyone else too.  All retailers are getting beaten up badly right now, and though it may sound counter intuitive, if you maintain your margins in the medium-term, the guy down the street will ultimately follow.  

Last week we told you about the Department of Labor increasing its investigations of gas stations.  This week I wanted to give you a bit more information on what they’re looking for.  One of the primary things that the people from Department of Labor talked with me about last week was the importance of paying employees their overtime.  Any amount of time that an employee works that is over 40 hours per week; they must be paid more money for it. 

The metric that the law uses is one week.  The exact workweek for an employee is set by the employer.  It must be any fixed and regularly recurring period of 168 hours – seven consecutive 24-hour periods.  During this period an employee can only work up to 40 hours for a regular rate.  Any amount of time after those 40 hours per week and they must be compensated with overtime pay.

It is against the law to shift hours between weeks.  You are not allowed to have a situation where an employee works 45 hours one week, and is paid for 40 hours, and then works 35 hours the next week and is paid for 40.  It does not matter if you and your employee have an agreement that this is ok, under the law it is illegal.  The DOL officials repeated to me on three separate occasions that two people cannot agree to break the law.  The law is the law, and though we may disagree with it (and believe me, I let them know I disagree with it!), we still must obey it until it is changed.  It is, however, legal for someone to shift their hours within the week, for example an employee normally scheduled to work 8 hours a day who instead works 12 hours one day and then 4 the next is perfectly acceptable as long as they don’t work over 40 hours in the workweek. 

An employee must also be paid for all the work they do, whether you authorized it or not.  All hours an employee works between the first and last “principal activity” must be compensated.  A principal activity is any activity that is a part of the employee’s job.   The courts have even decided that mental or physical exertion is not required for an employee to be considered working (Yes, they really have decided that).

In response to my message last week, I received a reply from a longtime member inquiring about family members working at their service station.

Family members work as long as they have to, to get the work (clean the rest rooms, shop, paint, sweep, pump gas), whatever it takes to get through the month, whether or not there is any pay involved, is this lawful?

While the Fair Labor Standards Act (FLSA) does not provide for an exemption from its protection to an employee who is a family member, the Wage and Hour Division has long held the position that an owner or anyone having a financial interest in a corporation which "overshadows his interest as an employee" shall not be found in violation or be eligible for back wages that might be due under the Act.  Similarly, if the employee is a spouse, child, or parent of the owner or partner of the establishment the employer would be advised of his obligation to pay those employees under the Act (minimum wage and overtime) and the worker's private right to seek remedy in the courts if they so desired.  However, Wage and Hour would not charge a violation nor seek back wages for these close family members unless that person is a complainant and has expressly stated a desire for payment of any Back Wages that he or she might be due.    

Remember, the Department of Labor is out there and they may very well be watching you right now, so make sure you are in compliance with the law!

Thanks for listening - See you next week!

Regards,
Sal Risalvato
Executive Director

NEWS AROUND THE STATE

7/13/2011:
American drivers spending more on fuel, driving less
In a seeming suspension of the normal laws of supply and demand, motorists continue to pay more for gasoline even though the overall amount of driving has declined for the fourth month in a row. This is especially confusing as the economy continues to stagnate.  Some experts believe that the reason for continuing high prices is partially due to the fact that America is no longer the world’s most energy-demanding economy as both India and China continue to consume higher amounts of resources.  Click above to read more on this.

7/9/2011:
In the used car market, fuel-sippers command top dollar
With high gasoline prices continuing to hurt the economy, many motorists are purchasing a higher number of used, fuel-efficient used vehicles to save at the pump.  This phenomenon, however, has also meant that the number of used vehicles that deliver good gas mileage has dwindled, driving up the cost of every pre-owned vehicle that is sold.  Members who also sell used vehicles at their establishment should consider these factors before either making a sale or purchasing a used vehicle to re-sell at your station.  Read the article above for more details.

7/4/2011:
Opinion on Education: U.S. students need longer school years to stay competitive
A recent opinion piece in the Times of Trenton ponders why the American school system has fewer days of instruction in a year than other industrial nations do.  The author notes that American students attend school 180 days of the year, yet other nations like South Korea have 220 days of instruction while Japanese students go to school 243 days a year.  The author advocates for a longer school year-cycle in order to better prepare students for a global market and keep America competitive for the next generation.

6/30/2011:
Auto Tech: Will automakers expand the use of start-stop engine technology?
The use of start-stop engine technology - which uses advanced computer programming to shut an engine off when the vehicle stops then restarts the motor seamlessly when needed - maybe expanded in the years ahead.  This technology, already used in most hybrid-powered vehicles, helps to significantly increase fuel efficiency in stop n’ go city driving.  With federal CAFÉ standards increasing and high gasoline prices, automakers are now exploring the use of start-stop engine programming for non-hybrid vehicles.  Will your mechanics and technicians have the ability to repair and maintain such vehicles?  Click above to read more on this story.   

CLICK HERE TO READ MORE ARTICLES IN OUR “NEWS AROUND THE STATE” ARCHIVE 

MEMBER BENEFIT PARTNER MESSAGE

TMP Energy Solutions
Another Way to Save on Your Energy Bills

We have had a number of NJGCA members successfully reduce their rate per kWh   signing up through our energy saving program. We know it’s difficult to collect 12 months worth of previous electric bills to get an “accurate” analysis when comparing a variable rate to a fixed rate, but we now have another option available. 

This new solution is a power purchase option; the other program is still in full force and has saved members thousands of dollars. If you sign up for the power purchase option, you will be grouped with other NJGCA members until the minimum KW demand is acquired. By pooling the member’s usage together, you will be able to take advantage, as large energy users do, and receive a lower kWh rate.

Each member will receive their own contract. Each member is responsible to sign and return the agreement the day it is received in order to secure the price for their group.

Please do your due diligence, so when you receive the proposal and the agreement you will be able to make an intelligent decision.

If by chance, you still want us to assess you bills, to give you a price to compare, we will require12 months of your most recent utility bills.

There are no bills required, but we would still like to have one bill per meter on file to check account #’s, meter #’s  service addresses and other pertinent information incase there is a problem.

The term of the agreement is for 12 months. During this term period, you will have price protection against any energy price increases along with a low fixed kWh rate.

If you are interested in becoming part of this power purchase option, please contact Phil Apruzzi at the NJGCA.

Remember when you sign up your energy through the NJGCA Energy Program, TMP makes a considerable donation to the NJGCA Scholarship Fund through their proceeds. This has no affect on your rate, and costs you nothing out of pocket.

We hope to help hundreds of NJGCA members reduce their utility costs by participating in this and our other cost reduction programs.  Our purpose, in the endeavor, is to help NJGCA members lower their energy costs while supporting the NJGCA Scholarship Fund. 

Contact Phil Apruzzi at 973-376-0066 or email Phil at phil@njgca.org. Mention that you are interested in saving money on your energy bills. NJGCA & TMP Energy Solutions will handle all the rest.