MATAWAN, NJ--(Marketwired - December 02, 2016) - An estimated 4.2 million more workers were set to be eligible for overtime pay starting Dec. 1, 2016, because of a rule change by the U.S. Department of Labor. On Nov. 22, a federal judge issued an injunction blocking the implementation of the rule, raising the prospect that the courts will eventually strike down the rule change. iCIMS, Inc., a leading provider of cloud-based talent acquisition solutions, released its quarterly U.S. Hiring Trends report today, which indicates the industries, cities and companies that are most exposed to this regulation by looking at the distribution of salaries of new hires across the U.S.
"Since this would be the first increase in the overtime threshold in more than 10 years, many businesses are of course concerned about how it will affect their labor costs," said Josh Wright, chief economist at iCIMS. "By looking at estimated salary levels among new hires, our data suggests which companies are most exposed to this regulation and how they have prepared for its implementation."
The Department of Labor proposed to raise the salary threshold for which workers are eligible to receive overtime pay -- more than doubling it from $455 a week ($23,660 a year) to $913 a week ($47,476 a year). Under the FLSA, workers eligible for overtime pay get paid 1.5 times their regular hourly wages for hours worked beyond 40 hours per week.
"Many employers have already raised salaries or taken other measures in anticipation of the new rule as announced in May of this year," Wright explained. "If the rule change survives the legal and political challenges ahead, the scope of its impact will be even more significant."
The U.S. Hiring Trends report presents data from January 2014 through September 2016, pulled from iCIMS' client base of more than 3,200 contracted customers. The report covers what the new rule means for employers, the types of companies that are most affected and actionable insights on how employers can manage their labor costs.
Key findings from the report include:
- Exposure to the new rule varies widely for major U.S. cities. The five cities with the highest proportion of salaried new hires that would be eligible for overtime pay are cities where a lower cost of living implies lower salaries overall: Cleveland, Salt Lake City, Tampa, Phoenix and Las Vegas. The five cities with the lowest proportion of salaried new hires that would be eligible for overtime pay are cities where a higher cost of living requires higher salaries overall: San Francisco, Washington D.C., Boston, Los Angeles and Austin.
- The larger the business, the higher the proportion of newly eligible workers. The largest proportion of total eligible salaries (both would be newly eligible and already eligible) occurs in the largest enterprise businesses, reflecting enterprise businesses' reliance on many low-level workers with modest salaries. The smaller the company size, the lower the proportion of new hires who would be newly eligible, perhaps because smaller businesses tend to be less hierarchical and tend to have less sophisticated benefits packages to offset low salaries.
- The financial activities and retail trade industries are among the most exposed. Retail relies on many low-wage workers, and certain areas of financial activities do as well, such as sales and office administrative support occupations that tend to have lower base salaries. Manufacturing and professional and business services are among the least exposed industries since they rely on a relatively larger proportion of highly skilled workers.
To view the full report please visit iCIMS Hiring Insights.
About iCIMS, Inc.:
iCIMS is the leading provider of talent acquisition solutions that help businesses win the war for top talent. iCIMS empowers companies to manage their entire hiring process within the industry's most robust Platform-as-a-Service (PaaS). Built on the foundation of a best-to-market talent acquisition software suite, iCIMS' PaaS framework, UNIFi, allows employers to expand the capabilities of their core talent acquisition technology by integrating with the largest partner ecosystem in talent acquisition to help them attract, find, screen, and manage candidates. Offering scalable, easy-to-use solutions that are backed by award-winning customer service, iCIMS supports more than 3,200 contracted customers and is one of the largest and fastest-growing talent acquisition solution providers.