Absence and Overtime Work:Empirical Evidence from Norway

This paper presents both theoretical and empirical analyses of the relationship between overtime work and absence. Demand for absence is analysed under the assumption that workers in a given firm can be represented by one of two types of workers, denoted overemployed and underemployed. Increased demand for overtime hours has a nonpositive effect on absence. If actual overtime pay is higher than the reservation wage, a higher demand for overtime hours will reduce absence. Otherwise absence is unaffected. On the other hand, demand for overtime increases if absence increases. The empirical analysis is carried out on quarterly panel data from 263 firms, covering the time period 1990-96. The empirical results confirm the theoretical predictions except from the effect of overtime hours on absence, where positive elasticities are estimated.Absenteeism;overtime work

On Overtime Hours Legislation

[Excerpt] In the United States, proposals have been periodically introduced into Congress to amend the provisions of the Fair Labour Standards Act (FLSA) to restrict the use of overtime hours and stimulate employment growth. This report summarizes the research I have conducted since 1970 on the likely effects of these proposed policy changes and my appraisal of their desirability. Although all of the empirical results I discuss pertain to United States data, they suggest the type of empirical analyses that should be undertaken with Canadian data before decisions about policy changes are made here. I begin in the first main section with a brief history of hours of work legislation in the United States that includes a conceptual framework that I have found useful in analyzing proposed changes in hours legislation. The variety of empirical analyses I have undertaken that pertain to the wisdom of raising the overtime premium are discussed in the second section. My analyses of proposals to require employee consent prior to the working of overtime are discussed in the third section. The paper ends with some brief concluding remarks

Overtime Violations

Overtime violations are especially prevalent in low wage jobs. Some of the industries with notably high instances of violations include the restaurant and hotel industries, retail, drug and grocery stores, private households and home health care. Within these industries, occupations with the most overtime violations include childcare workers, home health care workers, waiters and bartenders, cooks and food preparers, retail salespeople, cashiers and stock clerks. A quick glance at the national median hourly wages for these jobs shows that they all pay around just ten dollars an hour. This averages out to just 100 percent of the poverty level for a single person, which would make the worker eligible for various kinds of public assistance in New York State. Thus, the workers who are making the least amount of money are the ones who are most vulnerable to this exploitation

Long-Term Effects of Unpaid Overtime

Why do people work unpaid overtime? We show that remarkable long-term labor earnings gains are associated with unpaid overtime in West Germany. A descriptive analysis suggests that over a 10-year period workers with unpaid overtime experience on average at least a 10 percentage points higher increase in real labor earnings than their co-workers. Applying panel data models this result generally holds. Furthermore, we find evidence for gender specific differences with respect to the effects of cumulative average unpaid overtime work. Our results point to the importance of investment in current working hours beyond the standard work week to enhance real earnings prospects.Overtime, Overtime Compensation, Labor Earnings, Linear Panel Data Models

Some New Evidence on Overtime Use, Total Job Compensation, and Wage Rates

This paper is a replication of research reported by Steven Trejo in the 1991 American Economic Review. Trejo used labor force data from the seventies to assess the relevance of two contrasting views of the impact of overtime pay regulation. This paper reports research using a recent representative sample of U.S. private industry jobs that includes employer-reported measures of usual annual hours of overtime work and comprehensive measures of employer costs for job compensation. Comparisons are made between a set of jobs likely to be subject to U.S. overtime pay regulation—jobs paid hourly on 40 hour a week schedules—with another set of jobs that can offer overtime but are not likely to be subject to Federal overtime requirements—jobs on reduced hour schedules. The main findings of the research are: (1) higher wage rates are associated with a lower incidence of overtime work among the set of jobs with 40 hour work schedules, but not among the set of jobs with reduced hour schedules (2) in jobs using overtime work, more usual overtime work is associated with lower wage rates among the jobs with 40 hour work schedules, but not among the jobs on reduced hour schedules (3) higher “quasi-fixed” job compensation, such as employer health insurance costs, is associated with a higher incidence of overtime use. The paper also discusses some of the difficulties of interpreting these statistical results in the context of the labor market models considered by Trejo.overtime work hours; hedonic wage curve

The Detaxation of Overtime Hours: Lessons from the French Experiment

In October 2007 France introduced an exemption on the income tax and social security contributions that applied to wages received for hours worked overtime. The goal of the policy was to increase the number of hours worked. This article shows that this reform has had no significant impact on hours worked. Conversely, it has had a positive impact on the overtime hours declared by highly qualified wage-earners, who have opportunities to manipulate the overtime hours they declare in order to optimize their tax situation, since the hours they work are difficult to verify.tax exemption, overtime hours, working time

Skating on thin ice: rule changes and team strategies in the NHL

In an effort to stimulate a more exciting and entertaining style of play, the National Hockey Association (NHL) changed the rewards associated with the results of overtime games. Under the new rules, teams tied at the end of regulation both receive a single point regardless of the outcome in overtime. A team scoring in the sudden-death 5-minute overtime period would earn an additional point. Prior to the rule change in the 1999-2000 season, the team losing in overtime would receive no points while the winning team earned 2 points. This paper presents a theoretical model to explain the effect of the rule change on the strategy of play during both the overtime period and the regulation time game. The results suggest that under the new overtime format equally powerful teams will play more offensively in overtime resulting in more games decided by a sudden-death goal. The results also suggest that while increasing the likelihood of attacking in overtime, the rule change would have a perverse effect on the style of play during regulation by causing them to play conservatively for the tie. Empirical data confirm the theoretical results. The paper also show that increasing the rewards to a win in regulation time would not prevent teams from playing defensively during regular time.

The cyclicality of effective wages within employer-employee matches: evidence from German panel data

Using individual based micro-data from the German Socio Economic Panel Study (SOEP), I analyze the cyclicality of real wages for male workers within employer-employee matches over the period 1984–2004, and compare different wage measures: the standard hourly wage rate, hourly wage earnings including overtime and bonus payments, and the effective wage, which takes into account not only paid overtime, but also unpaid working hours. None of the hourly wage measures is shown to exhibit cyclicality except for the group of salaried workers with unpaid overtime. Their effective wages react strongly to changes in unemployment in a procyclical way. Despite acyclical wage rates, salaried workers without unpaid hours but with income from extra payments, such as bonuses, experienced procyclical earnings movements. Monthly earnings were also procyclical for hourly paid workers who received overtime payments. The procyclicality of earnings revealed for Germany is of comparable size with the one in the U.S.. JEL Classification: E32, J31bonus payments, effective wages, firm stayers, unpaid overtime, Wage cyclicality

U-Pick – Are Agritourism Workers Exempt From the Wage and Hour Protections of the Fair Labor Standards Act?

Pursuant to the Fair Labor Standards Act (“FLSA” or “the Act”), employer must pay workers at least the minimum wage and overtime pay for all hours worked in excess of forty hours in a standard workweek, unless the worker fits within one of the law’s exemptions. The FLSA contains a complete exemption for agricultural workers from the overtime pay provision and a partial exemption from the minimum wage provision. The exemptions from the minimum wage and overtime pay are not the only exemptions in the FLSA for agriculture, but they are the focus of this Article and are referred to herein as “FLSA’s agricultural exemptions.” Although the complete exemption has been modified in the years since the passage of the FLSA, farm workers still do not enjoy the full wage and hour protections of the FLSA

A New Keynesian Model with Overtime Labor

This paper extends the standard New Keynesian model by incorporating labor adjustment costs and overtime work. I show that labor frictions help reconcile the frequent price changes found in the microdata with the degree of sluggishness in inflation adjustment to output changes at the macro level. The introduction of labor frictions affects the dynamic behavior of economic variables (particularly employment and inflation) and implies that firms marginal costs should be measured in overtime costs. Marginal costs measured in overtime hours are procyclical and are predicted by inflation as suggested by theory.New Keynesian Phillips Curve, business cycle models, labor frictions, inflation dynamics.