The big news for business of late centers around the new overtime rule that applies when workers (other than “exempt” employees) work more than 8 hours a day (technically the rule applies for work over 40 hours per week). The rule changes the threshold for exemption, making more workers eligible for overtime pay. The advent of this new rule serves as an impetus for small business owners to reevaluate their workday.
Consider the following:
History of the 8-hour day
During the Industrial Revolution, it wasn’t uncommon for workers to put in 10 to 16 hours a day, 6 days a week. In 1791, carpenters in Philadelphia went on strike for a 10-hour day. It wasn’t until 1868 that Congress enacted an 8-hour day for federal employees, but the measure was flawed and most workers continued to have long hours. President Grant issued a National Eight Hour Law Proclamation in 1869, and the move toward this workday limit proceeded.
It really took until 1914 when Henry Ford reduced hours from 9 to 8 per day, while doubling wages, for the 8-hour day to become the norm. It was incorporated in the Fair Labor Standards Act in 1937, and is the same hours limit applicable today before which overtime is required. Of course, workers can put in more hours, which is not prohibited by law; the only change is that they must be paid time-and-half for the extra time (over 40 hours a week).
Typical workday for business owners
Small business owners aren’t paid by the hour, and they don’t watch the clock. A survey by The Alternative Board (TAB) several years ago found that:
- 19% worked 60 hours or more
- 30% worked between 50 and 59 hours
- 33% worked 40 to 49 hours
- 15% worked 30 to 39 hours
- 5% worked less than 30 hours
A book coming out in mid-July entitled The Five-Hour Workday: Live Differently, Unlock Productivity, and Find Happiness suggests that working less produces more. The author Stephan Aarstol is the CEO and founder of Tower Paddle Boards, a company that secured financing from Mark Cuban after appearing on ABC’s Shark Tank. The premise of the book, and the experiment of a 5-hour workday implemented in his company, is that shorter hours stimulates employee performance and increases employee retention.
A variation on the limited-hours theme is having workers on the job for just 4 days a week. In some instances employees may put in longer hours, say 10 hours, in order to accomplish the same work as in a 5-day workweek. One company, Basecamp, has a 4-day workweek from May through August, and maintains the 8-hour day during this period. Some companies offer the compressed workweek as an option to employees, so some work 5 days while others choose the 4-day week; all work the same number of hours within their workweek.
What should you do?
There’s no single answer for every business. You probably can’t ask more workers to work as hard, and as long, as you do. Having workers to put in more than 40 hours a week will cost you time-and-a-half (unless the workers are “exempt” from the overtime pay rule). Obviously, the 5-hour workday isn’t suitable for all types of businesses. It’s best for those involving creativity where attracting the best and brightest is crucial for success.
Best strategy: Give the question of the length of the workday in your business some thought now.