10
Overtime Pay: Analysis
Overtime pay is designed in general
to compensate employees for conditions
of work that are considered disadvan
tageous or burdensome. During the
past ? 20 years, the payment of pre
miums for work after some standard
number of hours in the day or week,
• on certain days in the week not sched
uled as regular work days, on late
shifts, and on holidays has become
widespread in American industry.
Overtime pay at time and a half for
work after 40 hours a Week is cur
rently a predominant practice; time
and a half for work after 8 hours a
day is also widely established. Double
time for work on paid holidays is .a
frequent practice. For Saturday and
Sunday work, limited information in
dicates that payment of time and a
half and of double time, respectively,
are most general.
Provisions covering premium - pay
practices in private industry have de
veloped through the collective-bar
gaining process or by employer per
sonnel action, and through legislation.
Great impetus to' the spread of pre
mium pay < for overtime was given by
the Fair Labor Standards Act of 1938.
Two years after its effective date,
overtime pay,, at time and a half after
40 hours a week was required for most
employees covered by the act. Although
this standard was not new, the act
served to give it the force of law and
extend it to many workers not previ
ously subject to overtime provisions.
The act did not provide for daily over
time, a principle recognized in other
federal legislation. The Walsh-Healy
Public Contracts Act of 1936 required
payment of tiihe and a half after 8
hours daily as well as after 40 hours
weekly. /The eight-hour law in 1940
which affected federal public works re
quired time and a half pay after an
8-hour day.
Provision for premium pay for. over
time on a daily basis was typical in a
variety of industries in the early 1940’s.
Time and a half after 40 hours weekly
or 8 hours daily was overwhelmingly
found.
*
Extra pay for holiday work was a
well established practice by 1941.
Double time was the most customary
rate for work on holidays for which
employees received straight-time with
out working. Rates of time and a half
and double time for working on un
paid holidays were about equally prev
alent among the union agreements
studied.
Premium pay for both Saturday and
Sunday work was commonly provided
in 1942. The premium rates most fre
quently specified were time and a h a lf
for Saturday and double time for
Sunday.
The principle of daily overtime was
recognized in about 95 per cent of the
union agreements analyzed for 1948
and 1949. Nearly all of these set pre
mium pay at time and a half the reg
ular rate. A few agreements, mostly in
the construction industry, provided
double time.
Overtime was paid after 8 hours’
work under all but a tenth of the agree
ments providing for penalty rates.
Payment for daily overtime after a
regular schedule of less than 8 hours
was largely restricted to agreements in
the apparel and the commercial and
newspaper printing industries.
For work beyond the regularly
scheduled work-week penalty rates
were somewhat less customary than
for daily overtime. Three-fourths of
the agreements analyzed specifically
provided for premium payment for
weekly overtime work, almost invari
ably at time and a half. Very few
agreements required double time. This
does not mean that premium rates were
not paid for work in excess of 40 hours
in the remaining agreements, inasmuch
as time and a half must be. paid to
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