What Is Overtime Pay? A History of Overtime and the FLSA

Overtime pay is extra pay employees receive for all hours worked over the applicable overtime threshold
for their location, generally 40 hours per week. The standard required overtime pay rate is one and a half times the hourly rate normally received by the employee, to be paid for all overtime hours worked.

Overtime pay is mandated in the United States by the Fair Labor Standards Act, or FLSA, which was introduced by Franklin D. Roosevelt in early 1938. The FLSA was a fulfillment of Roosevelt’s 1936 “New Deal” campaign promise to take steps to protect the American workforce from exploitation at the hands of their employers, and was an extremely controversial piece of legislation at the time.

Before the FLSA was introduced, hundreds of thousands of workers across the United States were working under deplorable conditions in factories and sweatshops, earning pennies a day for up to 18 hours of grueling and dangerous work. With a shortage of work and no other options, many workers had no choice but to submit to pay cuts, increased hours of work, and other forms of mistreatment and exploitation from their employers in order to feed their families.

To combat this problem, Roosevelt introduced overtime legislation specifically to prevent companies from overworking their laborers – mandated time and a half overtime pay was designed to discourage employers from forcing a laborer to work over 40 hours a week, as overtime laws made it cheaper to simply hire another worker to work the additional hours.

In addition to mandating overtime pay, the FLSA outlawed child labor and set a minimum wage of 25 cents per hour. Many employers complained that with the new regulations they would no longer be able to afford to pay their employees. Roosevelt realized, however, that the new law was absolutely necessary in order to protect the welfare of American workers. Deftly responding to critics during one of his famous “Fireside Chat” addresses, Roosevelt said “do not let any calamity-howling executive with an income of $1,000 a day, …tell you…that a wage of $11 a week is going to have a disastrous effect on all American industry.” On June 25, 1938, he successfully signed the Fair Labor Standards Act, with its overtime clause, into law.

Today, overtime law has been tweaked to keep pace with the changing American workforce, with the largest changes being the addition of certain types of employee who are completely exempt from overtime. Overtime is meant to protect manual laborers, and especially hourly-wage earners – in accordance with this many employees who are paid on a salary basis or do not do manual labor (like supervisors, administrative workers, etc) do not need to be paid time and a half wages for overtime hours worked.

There are over 70,000,000 (70 million) workers in the United States, however, who are eligible to receive overtime pay, and overtime remains one of the most important aspects of the United State’s labor law system.