eThemes of the Times

Pearson Education, in collaboration with the world's leading newspaper, The New York Times, is pleased to offer educators and students a carefully edited collection of recent New York Times articles for Economics.

Article:

Overtime Rules Dispute Is a Numbers Game

Questions:

1. Employers are usually not able to observe the amount of effort that workers put into their work. However, offering overtime work may be a way to distinguish diligent workers from those who shirk. Why does this work?
2. If the new labor regulation regarding overtime came into effect, what would be its likely effects on the quality of some services that traditionally require overtime work?
3. According to the article, the new regulation makes it easier to exempt white-collar workers earning more than $100,000 from overtime payments. What is the implication of asymmetric information when applied to a white-collar worker who is moonlighting, and his principal job earns him less than $100,000?