Economic Snapshot | Raising America's Pay

The new overtime rule will benefit working people in every state

Raising America's Pay

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The Department of Labor’s new overtime rule significantly increases the number of people who qualify for time-and-a-half pay for any hours they work beyond 40 in a week. Under the old version of the rule, far too many salaried workers were not covered by overtime protections because the salary threshold of $23,660 per year had not kept up with wage growth or inflation and was therefore far too low. Under the new rule, salaried employees making less than $47,476 a year must be paid overtime.

Economic Snapshot

The new overtime rule will benefit working people in every state: Share of salaried workforce in each state directly benefiting from the new overtime rule

State Share of salaried workforce directly benefiting Number of people directly benefiting Share of total salaried workforce covered under new threshold
Alabama 26.4% 167,000 39.1%
Alaska 17.6% 16,000 25.9%
Arizona 25.8% 258,000 36.0%
Arkansas 30.6% 130,000 44.0%
California 17.9% 1,076,000 27.4%
Colorado 24.0% 248,000 31.7%
Connecticut 16.2% 113,000 23.7%
Delaware 27.7% 49,000 35.6%
Washington D.C. 16.8% 29,000 23.6%
Florida 29.3% 1,068,000 41.9%
Georgia 28.2% 493,000 39.3%
Hawaii 26.4% 57,000 36.9%
Idaho 29.1% 64,000 35.6%
Illinois 22.8% 539,000 31.2%
Indiana 24.9% 248,000 34.8%
Iowa 25.2% 124,000 33.3%
Kansas 21.7% 98,000 29.3%
Kentucky 25.1% 149,000 34.1%
Louisiana 24.5% 174,000 40.8%
Maine 24.2% 46,000 32.6%
Maryland 20.2% 233,000 28.4%
Massachusetts 18.0% 262,000 25.0%
Michigan 20.1% 275,000 28.0%
Minnesota 16.4% 158,000 21.5%
Mississippi 25.3% 88,000 37.8%
Missouri 26.3% 257,000 35.0%
Montana 26.4% 33,000 37.8%
Nebraska 25.8% 81,000 34.7%
Nevada 26.9% 115,000 35.9%
New Hampshire 21.5% 54,000 28.6%
New Jersey 20.0% 410,000 28.3%
New Mexico 25.3% 61,000 37.0%
New York 23.6% 982,000 33.2%
North Carolina 25.7% 425,000 36.6%
North Dakota 27.5% 34,000 35.0%
Ohio 20.9% 351,000 28.7%
Oklahoma 26.2% 154,000 37.5%
Oregon 21.9% 124,000 29.1%
Pennsylvania 22.6% 459,000 30.8%
Rhode Island 21.8% 37,000 29.2%
South Carolina 30.3% 219,000 39.9%
South Dakota 28.2% 32,000 36.1%
Tennessee 29.2% 290,000 40.2%
Texas 25.4% 1,244,000 36.6%
Utah 24.1% 119,000 36.2%
Vermont 22.9% 25,000 31.5%
Virginia 21.1% 333,000 28.9%
Washington 20.2% 232,000 26.6%
West Virginia 30.7% 66,000 40.7%
Wisconsin 21.6% 187,000 27.1%
Wyoming 24.6% 20,000 32.4%

Note: The estimates consider all the workers who directly benefit from the federal salary threshold increase alone, and do not include a subset of salaried California and New York workers already covered by state thresholds higher than the old federal threshold.

Source: EPI analysis of the U.S. Department of Labor's proposed (July 6, 2015) and final (May 18, 2016) rule, "Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees," 29 CFR Part 541; and Current Population Survey Outgoing Rotation Group microdata, 2015

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This new rule will benefit working people in every state. In South Carolina, for example, 30.3 percent of the salaried workforce—219,000 people—will directly benefit from the new rule, bringing the total share of the salaried workforce covered under the new threshold to 39.9 percent. In Texas, over one million people will directly benefit—25.4 percent of the state’s salaried workforce. Nationwide, 12.5 million people (or 23.3 percent of salaried workers) will benefit, whether from time-and-a-half pay for any hours worked over 40 in a week, having their hours scaled back to 40 hours a week while still taking home the same pay, or getting a raise to put them above the threshold. Additionally, more than 100,000 people will benefit by getting a job doing the work that overworked people used to do for free.

 


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