Recent Release | 04 Jan 2024

Economic analysis of the DOL’s proposed overtime regulation

Economic Consulting Team

Oxford Economics


The measure the DOL has selected for this increase—a percentile of full-time southern salaries—is fundamentally arbitrary. In real (inflation-adjusted) terms, the proposed threshold ($1,158 per week) is 28% higher than the 1975 “long test” value when it was set, 40% higher than the current threshold when it was set, and only 3% below the level set in the DOL’s 2016 overtime regulation, which was invalidated by the courts. The DOL estimates that 3.4 million workers would be affected by the proposed adjustment to the EAP threshold. However, this estimate is premised on the DOL’s poorly grounded assumptions regarding the share of salaried white-collar workers who pass the duties test. If, as we suspect, the connection between salaried status and overtime exemption status is tighter than the DOL assumes, the number of affected workers could be up to approximately 7.2 million.


The DOL estimates that the 3.4 million workers that it estimates would be affected by the new rule would see their pay rise by $6 per week on average (0.6%) as a result of the proposed regulation. This represents an annualized economy-wide payroll cost of $1.3 billion. Additional non-payroll costs such as regulatory familiarization, adjustment, and managerial time bring the DOL’s total estimated annualized cost of the regulation to $2.0 billion. The DOL also identifies six additional unquantified costs of the proposed regulation and three unquantified benefits.


The DOL proposes to automatically update the EAP exemption threshold every three years following the implementation of the new threshold in 2024. However, the DOL’s proposed method for automatically updating the exemption threshold suffers from the same problem as its analysis of the costs of the proposed rule: a failure to model newly nonexempt affected workers losing their salaried status. Because the measure that the DOL has selected to adjust the exemption threshold (the 35th percentile of wages for full-time salaried Southern workers) is itself sensitive to which workers are paid salaried and which are paid hourly, this would result in a feedback effect where the exemption threshold is ratcheted ever higher as more workers below the new thresholds lose their salaried status.

To download the report, please complete the form below.

The experts behind the research

Our economic consulting team are world leaders in quantitative economic analysis, working with clients around the globe and across sectors to build models, forecast markets and evaluate interventions using state-of-the art techniques. Lead consultants on this project were:

Dan Martin

Senior Economist, Economic Impact

Laurence Wilse-Samson

Lead Economist, Economic Impact

Read the report

Complete the form below to download the report.

Recent Economic Impact reports

Climate Change and Food Prices in Southeast Asia: 2024 Update

This report highlights the vulnerability of food production cost in ASEAN given the impending physical and transition risks of climate change. It also highlights the critical policy response at domestic and international level to support the transition.

Find Out More
Economic Impact of NCIS: Hawai’i Season Two

Across 2022-23, production of Season Two of “NCIS: Hawai’i” resulted in total spending in the state of approximately $79.4 million.

Find Out More
The economic impact of the sports activities of public service media

This study shows how the sports activities of public service media supported €4.5 billion of GDP and 57,000 jobs across 31 European countries in 2022. The report also highlights wider economic benefits of public service media sports coverage, such as the way in which it leverages sponsorship income for sports bodies.

Find Out More
Global Trade Education: The role of private philanthropy

Global trade can amplify economic development and poverty alleviation. Capable leaders are required to put in place enabling conditions for trade, but currently these skills are underprovided in developing countries. For philanthropists, investing in trade leadership talent through graduate-level scholarships is an opportunity to make meaningful contributions that can multiply and sustain global economic development.

Find Out More