Local impact of overtime pay changes

COLUMBUS, Ga. – More than 150,000 workers in Georgia are affected by the overtime rule President Obama unveiled last week.  This rule would give salaried employees who make less than $47,500 a year overtime pay for working more than 40 hours a week.

Younger workers make up the largest portion of the population in the overtime plan.  According to the White House, workers ranging from ages 25 through 34 make up just over 31 percent of the affected workers.

Whitewater Express President Dan Gilbert says they have a lot of young people working for them that the overtime rule will negatively impact.

“Where it hurts us is the entry-level managers that come in on a lower salary to start with,” Gilbert said.

Phil Bryant worked in several human resources departments. He says a lot of organizations are currently not paying overtime correctly.

“Title and how they’re paid is not enough to determine whether someone is overtime or not so to be honest, many companies are already doing it wrong.  This will just help more companies do it more wrong,” Bryant said.

Ben Blair, Associate Professor of Economics at Columbus State University, says one option for employers is to reduce base pay for current workers.

“For instance, if I was paying $15 an hour for an employee and expecting that worker to work 50 hours a week, if I know have to pay them overtime for that extra 10 hours, I may reduce their base pay,” Blair explained.

Other options he suggests for employers include taking away some benefits such as vision and dental insurance.  He says employers also have the option to give employees a raise who are at the threshold, which is what Gilbert plans to do.

“If it goes into effect what we’ll have to do is give some of our management team a raise to keep them above that threshold.  Others we may have to eliminate their positions,” Gilbert explained.

Gilbert says some of their salaried positions may have to turn into hourly, paid positions.

The current overtime rule affects workers who make less than $23,660 a year.  The White House expects 4.2 million workers to be affected nationwide by this change.

The new overtime regulations will go into effect December 1, 2016.

 

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