Wage-Hours Contracts, Overtime Working and Premium Pay
نویسندگان
چکیده
Wage-Hours Contracts, Overtime Working and Premium Pay This paper offers a contract-based theory to explain the determination of standard hours, overtime hours and overtime premium pay. We expand on the wage contract literature that emphasises the role of firm-specific human capital and that explores problems of contract efficiency in the face of information asymmetries between the firm and the worker. We first explore a simple wage-hours contract without overtime and show that incorporating hours into the contract may itself produce efficiency gains. We then show how the introduction of overtime hours, remunerated at premium rates, can further improve contract efficiency. Our modelling outcomes in respect of the relationship between the overtime premium and the standard wage rate relate closely to earlier developments in hedonic wage theory. Throughout, we emphasise the intuitive reasoning behind the theory and we also supply relevant empirical evidence. Mathematical derivations are provided in an appendix. JEL Classification: J41, J33
منابع مشابه
The Cyclicality of Effective Wages within Employer– Employee Matches in a Rigid Labor Market
This study analyzes real wage cyclicality for male full-time workers within employer-employee matches in Germany over the period 1984–2004. Five different wage measures are compared: the standard hourly wage rate; hourly wage earnings including overtime and bonus pay; the effective wage, which takes into account unpaid overtime; and monthly earnings, with and without additional pay. None of the...
متن کاملThe Impact of the Overtime Premium on Employment and Hours in U.S. Industry
Excerpt] This paper presents empirical estimates of the intra-industry cross-section relationship between annual overtime hours per man and the ratio of these quasi-fixed costs to the overtime wage rate. Estimates are also made of the impact of a change in the overtime premium on employment and hours; these estimates have implications for policymakers concerned with the wisdom of increasing the...
متن کاملHow are the hours of work affected by regulations? : White-collar exemption and ‘name-only’ store manager in Japan
This paper examines whether overtime regulations have a significant impact on hours worked and hourly wages, focusing on so-called “name-only managers,” a category of employees recently in the news in Japan. The term “name-only manager” refers to an employee who has essentially the same salary and authority as other employees, but who is designated by the company as a manager to exempt them fro...
متن کاملDoes the Statutory Overtime Premium Discourage Long Workweeks?
Using a pooled data set consisting of 20 annual observations on each of eleven major industry groups, I estimate the effects of overtime pay regulation on weekly work schedules. After controlling for workweek trends within industries, the sharp expansions in overtime pay coverage resulting from legislative amendments and Supreme Court decisions produced no discernible impact on overtime hours. ...
متن کاملThe California Overtime Experiment: Labor Demand and the Impact of Overtime Regulation on Hours of Work
In 1998, California changed its regulation of working hours from daily overtime (required overtime for hours above eight per day) to weekly overtime (required overtime for hours above forty per week). We analyze the effects of this change in overtime law on hours of work using a neo-classical model of labor demand and overtime regulation. According to this model, for workers ‘at the kink’ where...
متن کامل