Overtime

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Overtime is the amount of time someone works beyond normal working hours. The term is also used for the pay received for this time. Normal hours may be determined in several ways:

• by custom (what is considered healthy or reasonable by society),
• by practices of a given trade or profession,
• by legislation,
• by agreement between employers and workers or their representatives.

Most national countries have overtime labour laws designed to dissuade or prevent employers from forcing their employees to work excessively long hours (such as the situation in the textile mills in the 1920s). These laws may take into account other considerations than humanitarian concerns, such as preserving the health of workers so that they may continue to be productive, or increasing the overall level of employment in the economy. One common approach to regulating overtime is to require employers to pay workers at a higher hourly rate for overtime work. Companies may choose to pay workers higher overtime pay even if not obliged to do so by law, particularly if they believe that they face a backward bending supply curve of labour.

Overtime pay rates can cause workers to work longer hours than they would at a flat hourly rate. Overtime laws, attitudes toward overtime and hours of work vary greatly from country to country and between various sectors.