A California law passed in 2016 requires businesses with more than 50 workers to pay at least $3 an hour to those working more than 40 hours a week.
But the law is a patchwork of state regulations that apply only to those with a regular job, such as a janitor or delivery driver.
In a new analysis, economists at the University of California-Irvine looked at the number of overtime hours worked by workers in all states.
The researchers looked at hours worked per worker per day from 2016 through 2022, when the overtime rule took effect.
The analysis showed the number would have risen only modestly had workers not worked overtime, even if they worked more than they should have.
“It’s a real problem,” said James Karr, a professor at UC-Irvin.
“The vast majority of workers, especially workers in the manufacturing sector, are not paying a living wage.”
The law requires businesses to pay overtime, but not overtime wages, and some workers, like those at restaurants, do not have to pay for overtime.
“They can still be eligible for unemployment benefits, but they’re not being able to,” said Michael Toner, an economist at the conservative American Enterprise Institute who reviewed the data.
“If they work 50 hours, they’re entitled to $3.40 an hour.
If they work 40 hours, that’s $2.40.
And if they work 45 hours, $1.50.
They’re still going to be eligible.”
Karr and his co-authors also calculated the number that would have been lost to the economy if businesses were not paying workers at least that much for overtime hours.
The average worker in the United States would earn $9,500 annually if they were working 50 hours per week, the economists found.
The authors calculated that a minimum-wage worker in California would earn just $12,300, and a full-time worker in New York City would earn only $14,000.
California also has the highest minimum wage in the country, at $10.10 an hour, and it has been one of the toughest to pass.
The state enacted its overtime law to boost productivity, and to provide some relief to low-wage workers.
But critics say that the rule has led to a huge increase in the number who don’t get paid enough to support themselves, or whose earnings are so low that they can’t afford basic expenses like food or housing.
“We know that if you are paid at minimum wage, you’re less likely to get a raise, and less likely, if you’re working a lot of hours, to have your hours covered,” said Adam Levy, a law professor at George Washington University.
“And you can’t have both.”
The bill has been controversial, with some lawmakers calling for the rule to be repealed.
“I think it’s very disappointing that it hasn’t been repealed, and I think the state of California should take a hard look at it,” said Republican state Sen. Mike McGuire, a San Francisco Democrat.
“There are some very, very, smart people who are trying to get the Legislature to repeal this law.
But we’ve got a lot more work to do, and we have to do it on our own.”
Some California business owners say they are seeing an increase in overtime costs because they’re paying workers more for overtime, and that’s hurting their bottom line.
“For businesses, they are getting more and more people, more and and more overtime,” said David F. Schiller, a spokesman for the California Restaurant Association, which represents the state’s largest restaurants.
“This is not an accident.”
The researchers found that there were 5.6 million more overtime hours in the state in 2022 than in 2015.
The total number of workers who were paid at least 80 percent of the minimum wage or overtime was 7.1 million, or about 17 percent.
The number of people who were at least 50 percent paid rose from 2.1 to 2.8 million, and the number at least 60 percent paid jumped from 3.6 to 5.2 million, according to the researchers.
The data did not provide information about how many of those people were full- or part-time workers.
“As you can imagine, that is a very significant increase,” said Karr.
“That is a huge number of employees.”
But the researchers did find a slight increase in wages for some workers.
The workers who received overtime for more than five hours per day were more likely to make more than $15,000 in wages, the study found.
About 10 percent of workers earning overtime were making more than that.
“Even though the number is higher than in the last decade, that increase is only modest,” Karr said.
“In fact, the increase is small.”