The Ethics of Overtime

This past week I mentioned the concept of stealing time from the employees, which I should hasten to note does not have any ethical issues; it’s a crime in most of the United States and an outrage anywhere. Hourly personnel must be compensated for each unit of time they work, and if you ask them to exceed the legally mandated standards for a shift they must be paid overtime. Where this question gets murky is when we consider the employees who are not paid on the basis of hours worked; the so-called “exempt” personnel. It has become so common for employers to consider the exempt classification as a blank check that there’s actually a common joke about this: Exempt personnel are called that because they are exempted from having a personal life. But while this is (usually) legal, and almost always stupid, I have to ask if it is also unethical…

First of all, we should probably acknowledge that forcing your employees to continue working beyond the 40 hours of the standard work-week isn’t just offensive to slacker sensibilities, it’s also counter-productive. Years of research on this have shown that individual performance drops off somewhere between 48 and 52 hours per week depending on the individual; if you exceed that point you will actually start getting less work done the more hours you require. Or, to put in another way, forcing your employees to work 60 hours each will generally result in less quality work getting done than if you had just let them leave after 40 hours, while also generating resentment, fatigue, absenteeism, stress-related medical conditions, and resistance/obstruction to management directives. Keep up this policy and you can confidently expect all of your employees with initiative and determination to leave for better jobs, driving the company into an eventual death spiral…

This runs counter to the best interest of the company, the stockholders, and anyone else who has a stake in its success, which may be considered both unethical and a gross violation of fiduciary responsibilities. It also has the effect of lowering the quality of life, working lifespan, and ultimately productivity of your best personnel, which would make this policy appear unethical in its own right. Yet, at the same time, there are numerous examples of industries where a 40-hour week isn’t possible, because tasks in that context take more than 40 hours per week to complete and can’t reasonably be split into multiple shifts – familiar examples being healthcare, childcare, law firms and entertainment. Even worse, at least from the ethical perspective, is the case where work could be completed by a second shift, but the company can’t afford to hire one…

It would be easy to dismiss these cases by saying that if the company can’t afford to meet expenses (payroll or otherwise) it is effectively bankrupt, and should just surrender and end operations – ignoring the fact that this will throw the employees out of work, ruin the stockholders, and possibly destroy the entire community. It would also be easy to dismiss the whole problem by saying that people are not being forced to work in these jobs or go into those careers, and should just quit if the hours are too long- ignoring the fact that sometimes there is no other suitable job available. And perhaps even worse yet is the fact that once we allow one company to squeeze unpaid overtime out of its employees because it faces bankruptcy we are stepping out onto some treacherous ground: how are we to determine who is close enough to the edge to be allowed such an exception, and who is doing this just to save money and fatten the bottom line?

Which brings me to the inevitable question: Under what conditions is it ethically acceptable for a company to demand extra hours of work from its employees just because they are of exempt status and (presumably) want to keep their jobs? If this is excused by the needs of the company, the community or even the nation, how dire must the situation become before this is acceptable, and who gets to decide? Most people would probably prefer working 45 hours a week to being fired outright, just as most firms would prefer hardship to insolvency, but at what point does this stop being a necessity of hard times or difficult industry conditions and become exploitation of people caught on the wrong end of a power imbalance?

It’s worth thinking about…