Does the employer make more money on time and a half?

Question

If an employer gets time and a half and pays the employee time and a half for all hours worked over 40 hours, does the employer make more money as a result.

Example. Employee gets 72 per hour and employer is billing client 92 per hour. Is the employer getting a bigger spread if they are being paid for the time and a half that they pay their contractor?

Answer 1

Possibily but not necessarily. It depends on what the total costs of doing business are and not just what the difference between what the employee and the company are getting from the client per hour. For example, if the company is able to pay an employee to work the overtime rather than incurring the cost of an additional employee (benefits, expenses, etc.) that may increase the profit margin for the company overall. Other costs other than just the employee's time and a half need to be considered in determining whether the company is making more money from the deal or not.