Effects of Department of Labor's overtime plan more dramatic in Georgia

A new analysis conducted for the National Retail Federation shows that new rules on overtime proposed by the U.S. Department of Labor would particularly affect management and professional employees in low-wage states and in rural areas where income and the cost of living are lower than the national average.

The Athens Banner-Herald is reporting that under the proposal, most individuals making up to $970 a week anywhere in the country would automatically receive overtime pay at time-and-a-half when working more than 40 hours a week, up from the current $455. The Labor Department chose $970 under a formula intended to give overtime to the lowest-paid 40 percent of full-time workers nationwide who currently receive a fixed salary.

But in 10 states – Alabama, Georgia, Hawaii, Idaho, Kentucky, Nevada, North Dakota, South Carolina, South Dakota and Texas – that dollar figure would bring at least 45 percent of full-time salaried workers under overtime rules. Another eight states – Arkansas, Florida, Louisiana, Mississippi, North Carolina, Oklahoma, Tennessee and West Virginia – would see at least 50 percent covered. The figure works out to the intended 40 percent in only one state, Maine.

The salary threshold would also be indexed, raising it to $1,400 by 2017 under one option proposed by the Labor Department. Within three years, only 22 percent of current salaried workers would remain exempt from overtime.

“This proposal has been spun as a way to raise the income of struggling workers but there are places where bankers or stockbrokers could be turned into hourly workers,” NRF Senior Vice President for Government Relations David French said. “The Labor Department has ignored the fact that the cost-of-living varies throughout the country.”