Overtime Pay: A Historical Look At Employment Law

The concept of overtime pay was introduced in the United States with the Fair Labor Standards Act (FLSA) of 1938. The FLSA was enacted by the 75th Congress and signed into law by President Franklin D. Roosevelt. The act created the right to a minimum wage and time-and-a-half overtime pay for non-salaried workers who work more than 40 hours a week. It also prohibited the employment of minors in oppressive child labour. The FLSA has been amended several times since its inception and continues to be a critical piece of legislation protecting workers' rights in the United States.

The Fair Labor Standards Act (FLSA) of 1938

Background and Development:

• The FLSA's more immediate history began in 1933 with the National Industrial Recovery Act and the President's Reemployment Agreement, which aimed to improve workplace conditions and establish fair trade codes. However, in 1935, the Supreme Court essentially invalidated this law.
• Roosevelt's reelection in 1936 and the Supreme Court decision in the case of West Coast Hotel Company v. Parrish in 1937 boosted the discussion on wage-hour legislation.
• Secretary of Labor Frances Perkins played a crucial role in developing the FLSA. She worked closely with legal experts and consulted Roosevelt, who supported the idea of establishing a minimum wage and addressing child labor abuses.

Provisions and Impact:

• The FLSA set the minimum hourly wage at 25 cents and the maximum workweek at 44 hours. It also banned oppressive child labor practices.
• The act applied to industries whose combined employment represented about one-fifth of the labor force.
• The FLSA introduced the concept of overtime, guaranteeing non-exempt workers time-and-a-half pay for hours worked beyond 40 per week.
• Congress amended the FLSA two years after its passage to further reduce the maximum workweek to 40 hours.
• The FLSA faced opposition and amendments that sought to weaken its provisions. However, it ultimately passed the House with a significant majority of 314-to-97 and was signed into law by President Roosevelt.
• Since its enactment, the FLSA has been amended multiple times, and many states have also enacted their own minimum wage laws.

The Fair Labor Standards Act of 1938 was a significant step forward in ensuring fair labor practices and protecting the rights of workers in the United States. It set the foundation for future labor laws and continues to shape the country's labor landscape even today.

The eight-hour workday

In 1869, President Ulysses S. Grant issued a proclamation guaranteeing an eight-hour workday and stable wages for government workers. This victory for government workers spurred private-sector workers to demand the same rights.

In the early 20th century, two large printing firms and the Ford Motor Company adopted the eight-hour workday. In 1916, the Adamson Act established an eight-hour workday for interstate railroad workers.

Finally, in 1938, Congress passed the Fair Labor Standards Act (FLSA), which limited the workweek to 44 hours and introduced the concept of overtime pay. The FLSA was part of President Franklin D. Roosevelt's New Deal and was designed to protect workers' rights and address poverty and unemployment. The FLSA was amended in 1940 to further reduce the workweek to 40 hours.

Overtime pay eligibility

The Fair Labor Standards Act (FLSA) of 1938 is a United States labor law that guarantees overtime pay to employees who work beyond 40 hours a week. This law was established by President Franklin D. Roosevelt to protect employees' rights in the workplace and prevent exploitation. Under the FLSA, employees are entitled to "time-and-a-half" pay for overtime hours, meaning they receive one-and-a-half times their regular rate of pay for each hour worked beyond 40 hours in a given workweek.

However, it's important to note that not all employees are eligible for overtime pay. Exempt employees, who are typically salaried and work in executive, administrative, or professional roles, are not entitled to overtime pay. To be considered exempt, an employee must meet specific criteria: they must be paid a fixed salary above a certain threshold (currently $684 per week), and their job duties must primarily consist of executive, administrative, or professional responsibilities.

On the other hand, non-exempt employees are eligible for overtime pay. These employees are typically paid hourly and work in industries such as construction, hospitality, and retail. If an employer does not pay the required overtime wages, employees can file an unpaid overtime claim with their local Department of Labor branch to seek the wages they are owed.

While the FLSA sets the national standard for overtime eligibility, it's worth noting that individual states may have their own overtime rules that meet or surpass the federal standards. For example, states like California, New York, Maine, and Washington have set higher salary thresholds for exempt employees. Additionally, some states, like Alaska, California, and Nevada, mandate overtime pay if workers exceed eight hours in a single workday, rather than the standard of 40 hours per workweek.

To ensure compliance with overtime laws, employers should maintain accurate time and pay records, clearly communicate company policies to employees, and carefully consider the classification of each employee. Staying up-to-date with federal and state regulations is crucial, especially as the landscape of overtime rules continues to evolve.

Exemption status

The Fair Labor Standards Act (FLSA) outlines the exemption status of employees from overtime pay provisions. Some employees are exempt from only the overtime pay provisions, while others are exempt from both the minimum wage and overtime pay provisions. It's important to note that exemption status is typically assessed on an individual workweek basis. Employees with both exempt and non-exempt duties in the same workweek are generally not exempt in that specific workweek.

Commissioned Sales Employees: Commissioned sales employees in retail or service establishments are exempt from overtime if more than half of their earnings come from commissions, and they average at least one and a half times the minimum wage for each hour worked.

Computer Professionals: Section 13(a)(17) of the FLSA states that certain computer professionals earning at least $27.63 per hour are exempt from overtime provisions.

Drivers, Driver's Helpers, Loaders, and Mechanics: Employees in these roles are exempt from overtime pay provisions if they are employed by a motor carrier and if their duties affect the safety of operating vehicles in interstate or foreign commerce.

Farmworkers on Small Farms: Farmworkers employed on small farms are generally exempt from minimum wage and overtime pay provisions. Young workers on small farms, with parental consent, are also exempt from child labor provisions.

Automobile Dealership Employees: Salesmen, partsmen, and mechanics employed by automobile dealerships are exempt from overtime pay provisions.

Seasonal and Recreational Establishments: Employees of certain seasonal and recreational establishments are exempt from minimum wage and overtime pay provisions.

Executive, Administrative, Professional, and Outside Sales Employees: Employees in these categories, as defined by Department of Labor regulations, and who are paid a salary, are exempt from minimum wage and overtime provisions. To qualify for exemption, employees generally must meet certain tests related to their job duties and be paid a predetermined and fixed salary of at least $684 per week.

Highly Compensated Employees: Highly compensated employees performing non-manual office work and earning a total annual compensation of $107,432 or more are exempt from FLSA if they regularly perform at least one duty of an exempt executive, administrative, or professional employee.

Outside Salespersons: Outside salespersons are generally exempt from overtime provisions.

Employees of the State or Political Subdivisions: Employees directly employed by the state or any political subdivision, including cities, counties, or special districts, may be exempt from certain overtime provisions.

Drivers Regulated by the U.S. Department of Transportation: Drivers whose hours are regulated by specific sections of the U.S. Department of Transportation Code of Federal Regulation are exempt from overtime provisions.

Drivers Regulated by California Code of Regulations: Drivers whose hours are regulated by Title 13 of the California Code of Regulations are also exempt from overtime provisions.

Employees Covered by a Collective Bargaining Agreement: Employees covered by a valid collective bargaining agreement that meets certain criteria, such as providing premium wage rates for overtime hours, may be exempt from overtime provisions.

Commission-Based Employees: Employees (except minors) whose earnings exceed one and a half times the minimum wage and for whom more than half of their compensation comes from commissions may be exempt from overtime provisions.

Student Nurses: Student nurses enrolled in an accredited school of nursing may be exempt from certain overtime provisions.

Railway Labor Agreement Employees: Employees who have entered into a collective bargaining agreement under the Railway Labor Act may be exempt from specific overtime provisions.

Airline Employees: Airline employees who work over 40 but not more than 60 hours during the workweek due to a temporary modification in their schedule at their request may be exempt from overtime provisions.

Carnival Ride Operators: Full-time carnival ride operators employed by a traveling carnival may be exempt from certain overtime provisions.

Commercial Fishing Boat Crew Members: Crew members employed on a commercial fishing boat are typically exempt from overtime provisions.

Motion Picture Projectionists: Employees whose duties are exclusively those of a motion picture projectionist may be exempt from overtime provisions.

Radio or Television Station Employees: Announcers, news editors, or chief engineers employed by a radio or television station in a small town or city may be exempt from overtime provisions.

Personal Attendants: Personal attendants not covered under the Domestic Worker Bill of Rights may be exempt from certain overtime provisions.

Babysitters for Immediate Family: Any person under the age of 18 who babysits for a minor child of their employer in the employer's home is exempt from overtime provisions.

It's important to note that exemption status is subject to change and can vary by state and industry. The information provided here is not exhaustive, and specific regulations may apply in certain cases.

Historical context

The history of overtime pay laws in the United States dates back to the 19th century, with the concept of "overtime" existing long before the term itself came into use. In the 1600s and 1700s, agricultural workers in the UK typically toiled from sunrise to sundown, seven days a week, with breaks bringing the average workday to around eight hours. In the 1800s, American workers often laboured for about 70 hours per week, and the length of the workweek became a significant political issue.

The Industrial Revolution, which reached the US in the early 1800s, brought about a new concept of a daily work schedule. Large factories demanded round-the-clock operations, and employees, including children, were expected to work ten to 16 hours a day, six days a week.

The first successful law mandating an eight-hour workday was enacted in 1869 by President Ulysses S. Grant, who guaranteed an eight-hour workday and stable wages for government workers. This sparked a movement for similar rights in the private sector.

In 1867, Illinois became the first US state to pass a law mandating an eight-hour workday. This led to a massive strike in Chicago, with celebrations turning into the infamous Haymarket riot.

In the early 20th century, labour unions and employers continued to clash, with unions demanding the eight-hour privilege be extended to private sector workers. In 1906, two large printing firms were the first US companies to institute an eight-hour workday. In 1916, Congress passed the Adamson Act, a federal law mandating an eight-hour workday for interstate railroad workers.

In 1926, the Ford Motor Company adopted a five-day, 40-hour workweek after previously adopting an eight-hour day a decade earlier.

The Fair Labor Standards Act (FLSA) of 1938, established by President Franklin D. Roosevelt, introduced overtime regulations, labour safety regulations, and "time-and-a-half" requirements for employees working over 40 hours per week. The FLSA aimed to protect employees' rights, curb exploitation, and address job scarcity. It also prohibited oppressive child labour and established a minimum wage.

Since the FLSA's inception, overtime compliance has evolved, with new rules introduced in October 2022, expanding overtime eligibility to an additional 4.2 million people in the US.

Frequently asked questions