Mar 31
The brief’s key findings are:
The new “no tax on overtime” law – in effect through 2028 – could encourage workers to change their behavior.
The changes could involve: 1) seeking more overtime hours; or 2) collaborating with employers to reclassify some work as “overtime.”
Policymakers should keep an eye on the issue due to potential revenue loss since:
while the current share of hourly workers with overtime pay is modest, many are close to exceeding the 40-hour threshold; and
more workers still – both hourly and salaried – could benefit from accepting lower base pay and redefining some of their work as “overtime.”
