Weekly earnings after an increase to the proposed standard salary level were estimated using the new wage (i.e., the partial employment contract model wage) and the reduced number of overtime hours worked. At the proposed standard salary level, the average weekly earnings of all affected workers will increase from $730.58 to $736.54, a change of $5.96 (0.8 percent). However, these figures mask the impact on workers whose hours and earnings will change because Type 1 workers make up more than 70 percent of the pool of affected workers. If Type 1 workers, who do not work overtime, are excluded the average increase in weekly earnings is $23.72. At the proposed standard salary level, multiplying the average change of $5.96 by the 4.6 million affected standard EAP workers equals an increase in earnings of $27.7 million per week or $1,441 million in the first year (Table 24). Of the weekly total, $897,000 is due to the minimum wage provision and $26.8 million stems from the overtime pay provision. For workers affected by the change in the HCE compensation level, average weekly earnings increase by $22.16 ($51.91 if Type 1 workers, who do not work overtime, are excluded). When multiplied by 36,000 affected workers, the national increase in weekly earnings will be $801,000 per week, or $41.7 million in the first year. Thus, Year 1 transfer payments attributable to this proposed rule total $1,482.5 million. If the Department assumed Type 2 workers received no additional pay for occasional overtime hours prior to the rulemaking (as discussed above), then Year 1 transfers would instead be $1,499.1 million.
Weekly earnings after an increase to the proposed standard salary level were estimated using the new wage (i.e., the partial employment contract model wage) and the reduced number of overtime hours worked. At the proposed standard salary level, the average weekly earnings of all affected workers will increase from $730.58 to $736.54, a change of $5.96 (0.8 percent). However, these figures mask the impact on workers whose hours and earnings will change because Type 1 workers make up more than 70 percent of the pool of affected workers. If Type 1 workers, who do not work overtime, are excluded the average increase in weekly earnings is $23.72. At the proposed standard salary level, multiplying the average change of $5.96 by the 4.6 million affected standard EAP workers equals an increase in earnings of $27.7 million per week or $1,441 million in the first year (Table 24). Of the weekly total, $897,000 is due to the minimum wage provision and $26.8 million stems from the overtime pay provision. For workers affected by the change in the HCE compensation level, average weekly earnings increase by $22.16 ($51.91 if Type 1 workers, who do not work overtime, are excluded). When multiplied by 36,000 affected workers, the national increase in weekly earnings will be $801,000 per week, or $41.7 million in the first year. Thus, Year 1 transfer payments attributable to this proposed rule total $1,482.5 million. If the Department assumed Type 2 workers received no additional pay for occasional overtime hours prior to the rulemaking (as discussed above), then Year 1 transfers would instead be $1,499.1 million.
FLSA_Proposed_Rule_Changes_.docx