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The Economic Effects of Canceling Scheduled Changes to Overtime Regulations 1 (November 14, 2016)

handle is hein.congrec/cbo3275 and id is 1 raw text is: . NOVEMBER 2016 The Economic Effects of Canceling Scheduled Changes to Overtime Regulations Provided as a convenience, this screen-friendly version is identical in content to the principal (printer-friendly) version of the report. Any tables, figures, and boxes appear at the end of this document; click the hyperlinked references in the text to view them. Summary The federal Fair Labor Standards Act of 1938 (FLSA) requires employers to provide certain workers with overtime pay when they work more than 40 hours in a week. That overtime pay must be at least 150 percent of the worker's usual hourly wage. The Department of Labor has issued a rule-set to take effect on December 1, 2016- that substantially raises the salary thresholds below which salaried workers are automatically eligible for overtime pay. By the Congressional Budget Office's estimate, the new rule extends the FLSA's overtime requirements to an additional 3.9 million workers (about 3 percent of all workers in the United States). Of those additional workers, about 900,000 regularly or occasionally work overtime and will therefore earn more (or work less) because of the changes. The changes' potential economic impact has raised concerns among policymakers. In this report, CBO analyzes how canceling the changes before they come into force would affect employers, employees, and family income in the United States through 2022. CBO finds that canceling the changes would reduce employers' payroll and compliance costs and increase profits. The cancellation would also decrease employees' pay, but it would increase real family income-that is, income adjusted Numbers in the text, tables, and figures may not add up to totals because of rounding. All dollar amounts other than salary thresholds are reported in 2015 dollars, having been adjusted for inflation using CBO's projections of the price index for personal consumption expenditures that was calculated by the Bureau of Economic Analysis. Unless otherwise indicated, all years mentioned in this report are calendar years.

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