Employers may prefer a standard workweek plus overtime at a premium wage rate to a fixed hourly rate producing the same wage costs because

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Offering overtime at a premium wage rate can serve as an incentive for employees to work longer hours, which may benefit the employer in terms of productivity or meeting deadlines. Additionally, employers may only need to pay overtime wages when they have a specific workload, rather than having fixed hourly rates regardless of workload. This can save the employer money in times of decreased demand or economic downturns. While trade unions may support such arrangements, it is not the primary reason why an employer may prefer it.

Employers May Prefer a Standard Workweek Plus Overtime at a Premium