Ben Gitis and Chad Miller of the American Action Forum detail one little-noticed consequence of the Obama administration’s overtime rule.
Next month the Department of Labor (DOL) will implement a rule to expand the number of salaried workers entitled to overtime pay. Starting on December 1, the minimum weekly pay needed to exempt workers from overtime pay will more than double from $455 per week to $913 per week. The benefits of this rule to workers are extremely modest, while the administrative costs to employers are quite large.
The overtime rule will have various effects especially on the higher education sector. The $724.3 million in costs due to the rule will only add to the overwhelming cost burdens already placed on the sector by the federal government. These costs will be passed on to students and will affect tuition, education quality, and the higher education workforce. Consequently, in higher education the overtime rule imposes major costs to provide minimal benefits.
