Million of Americans could get a pay boost from the government later this month.
The Department of Labor is expected to increase the income threshold from the current salary level of $23,500 to $47,000, regardless of job titles.
The change would affect 12.5 million Americans, which is about a third of the workforce, according to the Economic Policy Institute.
"They're going to take that money and spend," said Kishore Kulkarni, Ph.D., Distinguished Professor of Economics at Metropolitan State University Denver. "Therefore, the demand side will be raised, supply side will be blocked, and that is a classic case of increase in prices."
Loopholes are likely.
Kulkarni says employers could cap time sheets to 40 hours, opting to hire more workers instead of paying current employees for overtime.
"If they are going to put an arbitrary figure like $47,000, then the best idea is to pay somebody $48,000, and just not worry about giving them overtime," said Kulkarni, describing how employers may react to the change.
It is not clear exactly when the Labor Department could announce the change in overtime rules, but analysts say it will likely happen by the end of the month.
