The Fair Labor Standards Act, passed in 1938, set a minimum
wage and required overtime after 40 hours per week. The overtime “penalty” of
time-and-a-half pay was meant to encourage employers to hire another employee
instead of paying someone at the higher overtime rate. Today, some economists
believe that the recent Department of Labor rule that qualifies more employees
for overtime will prompt employers to curtail overtime and hire new workers.
For more, see http://www.wsj.com/articles/overtime-rules-seen-boosting-low-wage-hiring-1437333807
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