Effect of Mandatory Overtime

Over the last two decades, American workers have been clocking more and more hours on the job, and they now work more hours than workers in any other industrialized country. Annual work hours are 4% higher than they were in 1980, amounting to an extra 1 hour and 30 minutes at work per week, on average (ILO 1999). The cumulative rise in time on the job is even higher, of course, for families. In 1998 the typical middle-income, married-couple family worked six more weeks a year than did a similar family in 1989 (Mishel et al. 2001). Workers are also clocking more overtime hours. Almost one-third of the workforce regularly works more than the standard 40-hour week; one-fifth work more than 50 hours. Hourly manufacturing workers, the only group tracked by government statisticians, are putting in 25% more overtime than they were a decade ago.1 In virtually every industry within the bellweather manufacturing sector, overtime had reached a record by the end of the 1990s.

The growth in overtime work, while helping to drive the healthy growth in output in the U.S., has unhealthy social costs. It is taking its toll not only on workers, but on their families, communities, and, ultimately in many cases, patients, customers, and employers. Families burdened by longer work hours are more likely to find it difficult to balance the conflicting demands of work and family. More hours spent at work mean less time with the family, less time to help a child with homework, less time for play, less time for housework, and less time for sleep. These sacrifices can translate into increased risk for accidents and injuries; greater chronic fatigue, stress, and related diseases; reduced parenting and family time; and diminished quality of goods and services – a serious public concern particularly in the health care sector. The social costs associated with the growth in work hours and persistent overtime are particularly worrisome when the long hours are involuntary.

The tenuous balance between work, family, and other non-work activities is thrown off most when overtime is mandatory (also referred to as “compulsory” or “forced”). Mandatory overtime hours are those above the standard work week (usually 40) that the employer makes compulsory with the threat of job loss or the threat of other reprisals such as demotion or assignment to unattractive tasks or work shifts. Given that overtime can have detrimental effects on workers and their families, mandatory overtime is a serious public policy concern, yet current law does not address it. The Fair Labor Standards Act of 1938 (FLSA), which regulates overtime, currently imposes no limits on overtime hours, nor does it prohibit dismissal or any other sanction for declining overtime work. Rather, the FLSA merely requires that payroll employees (who are not “exempt” from the overtime requirements of the FLSA) be paid an overtime premium of at least one-half of regular rate of pay for each hour worked over 40 during a work week.

With the rise in household work hours and overtime, there is a growing need for limits on involuntary overtime. Labor laws such as the FLSA need to be amended to protect workers against excessive work hours and mandatory overtime and to protect the public from the dangers of an overburdened, stressed workforce. Employees should have the legal right to refuse overtime after having worked a certain number of hours – without fear of job loss or other sanctions. Furthermore, an employee should be asked to work beyond some legislated upper limit only during exceptional circumstances such as a temporary health or public safety emergency. Amendment of the FLSA can preserve the right of workers to work long hours if they choose to do so, but ensure workers the right to refuse mandatory overtime.

The need for limits on mandatory overtime
In the United States, unlike in most European countries, employment is “at will,” meaning that the employer can dismiss an employee for any reason or for no reason – except gender, race, age, or disability. Thus, employees who refuse to work overtime can lose their jobs or face other reprisals such as demotion or assignment to unattractive work or to less desirable shift times such as nights or weekends. Faced with the legal threat of these kinds of sanctions, many employees often work more hours than they would like and, in some cases, work an extreme number of hours well beyond the standard 40 a week.

The only disincentive to the unbridled use of overtime by employers is the FLSA requirement that payroll employees covered by the act be paid time-and-a-half for hours worked above 40 in a week. The Department of Labor estimates that about 74 million workers were covered under the FLSA overtime provision in 2000. 2 There is evidence that the required overtime pay premium for these “non-exempt” workers is effective – about 44% of “exempt” workers (i.e., most executives and supervisors, certain administrative and professional employees, and outside salespeople) work longer than 40 hours per week, compared to only about 20% of non-exempt workers. However, the share of the workforce exempted from the FLSA has been growing slightly (Hamermesh 2000) over time, despite recent court decisions reaffirming FLSA coverage over occupations such as journalists, paralegals, some computer technicians (those positions that are not highly paid or highly skilled), and most on-call positions. Moreover, business interests continue to push Congress to broaden the exemptions to include “inside sales employees” and licensed funeral directors and embalmers. They also are lobbying to create a new classification of “knowledge workers,” such as computer and network systems analysts and degreed clerical personnel, who would be exempt from the overtime regulations.

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