Salaried Overtime Requirements: Employers Will Offset Them with Lower Pay

The Obama Administration has announced plans to require overtime pay for salaried employees who earn less than $50,440 a year. Economic research shows that employers will offset new overtime costs by lowering base salaries. As a result, these regulations will have little effect on total weekly earnings or hours worked. They will require employers to rigidly monitor salaried employees’ hours. This would proscribe the flexible working arrangements that many salaried employees value. These regulations will limit workplace flexibility without improving pay.

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