What is overtime pay? A History of Overtime Law and the FLSA
Overtime is a regulation of organized labor designed to help improve the working hours and working conditions of workers, and prevent exploitation by their employers. Under the United State's current overtime rules, employers must pay their employees "time-and-a-half" wages (one and a half times the employee's regular hourly wage) for all hours worked over the national overtime limit of 40 hours per week. Many states also have their own overtime cutoff laws.
Overtime was introduced by the Fair Labor Standards Act in 1938
Before overtime regulations were introduced in 1938, working hours were often exceedingly long and brutal for the average American worker. Blue-collar employees in industrial settings often worked 10-16 hours a day - many employers took advantage of high poverty rates to force their employees to work around the clock just to earn enough money to keep food on the table.
In 1938, following years of depression and economic hardship across the country, president Franklin D. Roosevelt made good on his campaign promise to protect American workers with a sweeping new labor standards law called the FLSA (Fair Labor Standards Act). In addition to creating the Minimum Wage and labor safety regulations, the FLSA introduced overtime regulations guaranteeing all non-exempt workers time-and-a-half pay for all hours worked exceeding 40 per week.
The overtime rules enacted were designed to address several of the main problems Roosevelt sought to address with his labor reforms - lack of jobs, and the exploitation of those who had jobs. Overtime pay regulations would serve to discourage companies from overworking their employees in order to avoid paying overtime wages, and as a result encourage additional hiring to make up for the fewer hours being worked by their existing employees. A company that had hired one worker to work 60 hours a week before the FLSA might, for example, hire two workers at thirty hours a week after overtime was mandated to avoid paying a single worker 20 hours worth of overtime wages.
Overtime was designed with a number of exceptions
Because overtime was specifically designed as a protection for the blue-collar working class, a variety of exceptions were made to the FLSA's overtime provisions. Most overtime-exemptions workers are salaried employees who do non-manual labor or management/administrative duties, as well as some exceptions such as housekeepers and salespeople who may work non-standard hours in a unique work environment as part of their jobs. For more information, see FLSA overtime exemptions.
The most recent changes to overtime law were made in 2004 under the "FairPay" initiative by president George Bush. In this controversial piece of legislation, the definition of "overtime exempt employees" was changed to include many low-level working managers and/or supervisors by reclassifying them as "executives". This change caused millions of workers to lose overtime protection, and sparked a huge debate culminating in the attempted repeal of the FairPay act.
Less controversial changes brought about by the FairPay act included changing the method used to determine overtime exemption from being title-based (in which certain job titles are exempt, regardless of what the workers actually do) to being job-description based. In this way, workers such as executive assistants, who were previously lumped together in the exempt category, are now reclassified as exempt or non-exempt based on the actual job functions required for their particular position.
Overtime laws today
Today, overtime compliance is managed by the federal and state branches of the U.S. Department of Labor. Employees who are not paid proper overtime wages for hours worked can file an unpaid overtime claim with the local Department of Labor branch, who will work with the employer to ensure compliance with the law. In 2008, there were close to 200,000 individual backwage complaints sucessfully settled by the Department of Labor with over $140.2 million dollars in backwages transferred.
Since its inception in 1938, overtime law has proved to be one of the core fundamentals necessary in maintaining a safe and equal workplace. The FLSA continues to be modified in order to meet the changing needs of the American workforce, and overtime regulations will continue to play a key part in maintaining and enforcing a fair system of organized labor in the United States.
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