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Overtime Pay Rates and Unemployment

April 3, 1964

Report Outline
Plan to Boost Pay For Overtime Work
Premium Pay: Purposes and Effects
Unemployment and Workers' Leisure Time

Plan to Boost Pay For Overtime Work

Use of Overtime Penalty to Create New Jobs

He johnson administration's bill on overtime pay, though unlikely to be enacted during the present session of Congress, embodies a concept that will be a matter of controversy for a long time to come. The proposal is that overtime work can be made so costly for employers that they will hire additional workers at regular wage rates rather than pay the penalties required for overtime work. It amounts in effect to a share-the-work plan aimed to help solve the problem of persistent unemployment.

The bill now before Congress would amend the Fair Labor Standards Act of 1938 to require employers in selected industries to pay double the basic wage rate for hours worked in excess of 40 a week; under existing law, employers subject to the Fair Labor Standards Act are required to pay for overtime work at one and one-half the regular wage rate. Hearings before a House Labor subcommittee, which opened on Feb. 17, were scheduled to continue for only five days, but so many requests to be heard were received from employers and employer organizations—all adamantly opposed to the bill—that the hearings were extended for an additional period of seven weeks. They are now due to close on April 10.

Forming of the Battle Lines on Overtime Pay

Despite current opposition, the overtime pay issue is apt to gain increasing prominence as a potential means of curbing unemployment caused by automation. Labor leaders appear determined to seek higher overtime pay through both collective bargaining and legislation; labor objections to the pending bill have been limited to date to a complaint that it does not go far enough. More will be heard of the overtime pay question as negotiations for new labor contracts in big industries get under way.

ISSUE TRACKER for Related Reports
Unemployment
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Mar. 13, 2009  Vanishing Jobs
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Mar. 18, 1983  The Youth Unemployment Puzzle
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Oct. 14, 1977  Youth Unemployment
Jul. 11, 1975  Underemployment in America
Dec. 16, 1970  Unemployment in Recessions
Mar. 05, 1965  Unemployment Benefits in Times of Prosperity
Apr. 03, 1964  Overtime Pay Rates and Unemployment
Feb. 01, 1961  Unemployment and New Jobs
Jan. 07, 1959  Lag in Employment
Apr. 16, 1958  Emergency Jobless Aid
May 16, 1956  Lay-Off Pay Plans
Nov. 12, 1953  Jobless Compensation in Boom and Recession
Feb. 25, 1949  Defenses Against Unemployment
Jul. 30, 1945  Full Employment
Nov. 25, 1940  Unemployment Compensation
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Feb. 21, 1928  The Employment Situation in the United States
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BROWSE RELATED TOPICS:
Unemployment and Employment Programs
Wages
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