'Time and a Half's the American Way' - A History of the Exclusion of White-Collar Workers from Overtime Regulation, 1868-2004

Abstract

Ever since 1938, the U.S. national wage and hour law, the Fair Labor Standards Act, has offered some workers modest protection against overwork by requiring employers to pay time and a half in order to discourage them from forcing employees to work more than 40 hours a week. However, Congress also excluded so-called executive, administrative, and professional employees from the law so that today as many as 30 million white-collar workers can legally be required to work overtime without compensation. And in 2004 the Bush administration issued regulations making it easier for companies to deny protection to even more employees. This study offers a panoramic analysis of the history of these exclusions, beginning with the tradition of treating white-collar workers differently in 19th-century over-time laws for federal workers and even immigration and Civil War pension laws. The book’s centerpiece is an examination of the verbatim transcripts (used here for the first time) of the crucial hearings in 1940, which the Labor Department’s Wage and Hour Division called in response to petitions by employers dissatisfied with its initial regulations of 1938. This scrutiny permits a deep look into the arguments and mind-sets of employers, unions, and government regulators that shaped the basic framework of the expansive exclusion of white-collar workers, which has survived largely intact into the 21st century. The analysis concludes that the disparate treatment of white- and blue-collar workers made little sense in 1938 and even less now, when the former far outnumber the latter, but at the same time the differences in their working conditions have narrowed considerably. The root legal problem is Congress’s failure to identify these workers or to explain why it excluded them — a problem compounded by the Labor Department’s regulations lacking any relationship to the purposes of the overtime law. Whereas the time-and-a-half monetary penalty was designed merely as a tool, its transmogrification into the main purpose of the statute in the form of overtime premiums enabling workers to maintain their standard of living by working long hours stands the whole rationale of hours regulation on its head. This perverse focus on money rather than time has resulted in subjecting white-collar workers to a means test, despite the fact that their relatively high salaries are irrelevant so long as the recipients are also exposed to the effects of over-work. At the same time, millions of white-collar workers with salaries lower than covered blue-collar workers’ wages are also excluded from the law.

Keywords: overtime, Fair Labor Standards Act, white-collar workers, time and a half, executive, administrative, professional employees, eight-hours laws, Black-Connery 30-Hours Bill, National Industrial Recovery Act International Labor Organization, Stein Report, U.S. Department of Labor