Employee Law & Labor Relations

The Fair Labor Standards Act (FLSA) and its mandates for such matters as minimum wage, overtime, etc. The threshold under which salaried employees must be paid overtime was set in 1975 at $23,700 USD, and was not changed until 2016 when President Barack Obama raised the threshold by executive order to nearly $50,000 USD (the 1975 figure adjusted for 41 years of inflation). According to President Obama, the new salaried employee overtime rule will provoke employers to do one of three things: 1) pay overtime wages to their salaried employees who make less than the new threshold, 2) give raises to salaried employees who are currently paid less than the threshold so that they remain ineligible for overtime, or 3) hire more employees to cover the overtime workload and constrain salaried employees paid less than the new threshold to a 40-hour work week. Consider and comment on the following questions, be sure to answer every part of each question:

 1. Of the three options that Obama's executive order is intended to provoke, which do you think businesses are most likely to choose and why?

2. Are there any other options? If so, what are they and what are the legal challenges involved?

3. It is argued that this executive order will benefit the macro-level economy regardless of the choices that employers make. Do you agree? Why or why not?