If Not 40 Hours, Then What? Defining the Modern Work Week

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Is the traditional 40-hour work week dead? Today’s nine-to-fiver can only look at all of the alternative proposals being bandied about and savor the possibilities: the four-day work week, the 30-hour work week, the 21-hour work week, and even the no-day work week. With the advent of telecommuting, flexible hours, globalization and answering emails after hours and on vacation, the American worker has entered the era of the fuzzy work-home divide.

Billionaire Carlos Slim and Google co-founder Larry Page are among those questioning the usefulness of the 40-hour work week. Advocates for change say society is on the cusp of nearly utopian conditions — a better work-home balance, and greater productivity and efficiency. But are we?

“The notion of work is changing. The boundaries are blurred,” says Janice R. Bellace, a Wharton legal studies and business ethics professor. “When is someone ‘at work’ or ‘not at work’ when we are tethered to work 24/7 by our smartphones? It took many decades for societies to agree to the norm that people should work a reasonable amount of time per day.”

The eight-hour day, Bellace noted, is Convention No. 1 of the International Labour Organization. “The call for an eight-hour day was a rallying cry in Europe in the late 19th century,” she added. “We have moved into a post-industrial society, the Information Age. We don’t have norms yet. It remains to be seen how long it will take for these norms to emerge.”

But norms for whom? While white-collar workers may see new options emerging for how to structure work life, others may be fated to remain on one side of yet another manifestation of widening inequality. That is why some are calling for a universal reduction in the number of hours worked.

Anna Coote, head of social policy at the New Economics Foundation in London, argues in a forthcoming report that a 30-hour work week across all jobs and sectors would allow more family time and blunt the endless cycle of earning more to buy more, while redistributing employment more evenly among workers.

“Time is a vital resource in the core economy, and some people have much more freely disposable time than others.” –Anna Coote

“The logic of this proposal for a move toward shorter and more flexible hours of paid work extends well beyond the workplace,” says Coote. “Time is a vital resource in the core economy, and some people have much more freely disposable time than others. Reducing the standard working week could bring a range of social, environmental and economic benefits.”

More Hours, Fewer Results

It may be no accident that the viability of the 40-hour work week is being called into question now, says Wharton management professor Nancy Rothbard. “There is something about the aftermath of this recession we’ve just had where there’s been a big push with productivity — people weren’t hiring, and if you had a job, you were doing a lot,” she says. “And right now we’re seeing greater hiring numbers and unemployment is down, so the feeling is, ‘OK, we’re past the worst of it,’ and maybe we can start to think about whether [the speed-up in work] has led to health problems. It is a really interesting discussion we’ve started to have.”

Statistics bear out the impression that Americans are working more. A September Gallup survey of 1,200 workers reported that Americans were on the job 46.7 hours per week — nearly an extra full day each week, and the highest number since 2002. Just 40% said they worked only 40 hours per week, with 18% clocking in at more than 60 hours. Americans also work more than in any others in the industrialized world — longer hours and less vacation, and they take a later retirement.

Several studies suggest health problems associated with overwork, and in addition, productivity for many begins to fall after working past a certain number of hours. “It is pretty conclusive that burn-out occurs,” says Peter Cappelli, a Wharton management professor and director of Wharton’s Center for Human Resources. “But lots of factors can affect when that happens, such as how interesting the work is and how stressful it is.”

How many hours per week would be ideal? “For whom? Employers would prefer fewer workers and more hours given the fixed costs of employment — it costs a lot just to hire someone,” Cappelli notes. “Employees would prefer less hours at a given wage. I think the tension between those two is resolved a bit by the point when performance begins to drop and when life outside of work is squeezed by hours of work. But the amount of work isn’t necessarily the big thing…. Flexibility of when one works also matters and can reduce both problems.”

New Policies and Labor Law

Three or four decades ago, when labor unions were powerful and tales of exploitation from the industrial era were still fresh in the national consciousness, workers were generally aware of the line between exempt workers (which is to say, management, who do not get overtime), and non-exempt (those who qualify for overtime pay past a certain number of hours). But over the past 30 years, workers’ knowledge of their rights has decreased greatly, says Bellace.

“Consider that in the 1960s and 1970s, many people in the labor force might have remembered the Fair Labor Standards Act (FLSA) being passed, or their parents told them about the statute,” she notes. “In the same time period, FLSA enforcement activity by the Department of Labor has declined. Thus, if a person had a complaint about working overtime, or not being given the mandatory break, the person could complain to the Wage & Hour Division of the Department of Labor, but the DOL was not actively going out and looking for FLSA violators.”

“Employers would prefer fewer workers and more hours given the fixed costs of employment — it costs a lot just to hire someone.” –Peter Cappelli

Then, about 10 years ago, some lawyers realized that taking a “wage hour” case could be financially feasible, Bellace says. “Lawyers realized that if there were thousands of plaintiffs, the monetary award would be substantial, and even if the lawyer charged a small percentage of the award, the lawyers’ fee would be worthwhile. Lawyers in FLSA cases do not charge the one-third of the award that negligence lawyers charge. There are no punitive damages, or pain and suffering damages, either. But there is back pay. The employer also has to pay penalties and fines.”

In fact, whereas 20 years ago most labor lawsuits being filed were discrimination suits, today about half are discrimination and the other half relate to wages and hours, according to Daniel P. O’Meara, a partner at Philadelphia law firm Montgomery McCracken. “A ton of litigation going on right now is employees saying they are misclassified as being exempt and that they should be getting overtime.” The reason for the shift? “If an employee came to a lawyer and said, ‘I got fired,’ more often than not they were not discriminated against,” says O’Meara. “It was an uphill battle to prove. But on the wage-hour front, the way it works is that everyone is non-exempt unless the employer can prove he was exempt. The burden is on the employer.”

As the question of the work week plays out, one voice that was a strong part of previous public discussion is now muted. In the 1950s, about a third of American households were headed by a union member. “As such, unions were viewed as the legitimate spokesperson for working persons,” says Bellace. But union membership has plunged in recent years — down in 2014 to just 11.1% of workers, according to the U.S. Labor Department.

“Who speaks for the average working person [today] — let’s say those persons who make between $30,000 and $70,000 a year? Political parties and others may claim to do so, but the reality is that no one speaks for the average person,” says Bellace. “In fact, many people will express their frustration with our politicians and political parties by saying, ‘no one speaks for people like me.’ And the AFL-CIO (the American Federation of Labor and Congress of Industrial Organizations) is too weak nowadays to be seen as the voice of American workers.” Many unions today are not viewed as the collective voice of the worker, but as just another special interest group, she adds.

The ‘No Hour’ Work Week

Whatever change may come in work week structures, it’s not as if you should look forward to an employer who lets you sleep on the job and take as much vacation time as you want — unless you’re going to be working at Betterment. The New York stock trader and broker has instituted what it calls a “no-hour work week,” which is really just a euphemism for saying that the firm allows workers to set their own schedules, work at home or at the office, and take as much vacation as they see fit. They are also expected to work on projects nights and weekends. This, of course, requires that productivity be gauged by a different set of metrics than office face-time.

“We have a very open work environment that is very, very results driven rather than time clock driven,” says Joe Ziemer, Betterment’s director of communications. But what kind of results? Like most workplaces, Betterment has a wide variety of job types, each requiring a different set of criteria to assess performance. “I could have a goal that I want new customer sign ups to increase 25% in the first quarter over the last quarter,” Ziemer notes. “We have a software system where goals are logged, and then people typically in their annual review will go over their goals and work on the next set of goals.”

“The wage and hour laws are badly in need of overall reform, and I don’t know that this administration is going to do it. Companies are paying out seven- and eight-figure settlements all the time.” –Daniel P. O’Meara

When the company was founded in 2008 with three employees, using bespoke metrics wasn’t a big deal. But now that there are nearly 85 workers? “We’ve managed to maintain it incredibly well,” says Ziemer. “You have to hire the right people so nobody abuses the system.” So far, he adds, no one has. Naps are encouraged, but not just any kind of nap. “Our CEO will send out memos with a study attached on the most efficient way of napping.”

Creating a New Model

But companies have to be careful about metrics of productivity, experts say. Some contributions to a workplace are hard to quantify, and others may be downright deceptive. “In an ideal world, you would look at different industries and see what is the best way to measure productivity,” says O’Meara. However, “I’ve seen people in sales positions who put up the numbers, but do so by diminishing an employer’s brand. I’ve seen sales reps who disconnect a call if they feel [the sales prospect] is not going to be productive, and the caller calls back and someone else ends up talking to that person for 45 minutes. In the law firm world, there is money in the door, and that is a good starting point for measuring someone’s contribution. But that shouldn’t be the end point, because there are a million other things that need to be done around a law firm.”

O’Meara notes that the last meaningful reform to laws governing overtime came in 1951, when the nature of the economy, work life and society were quite different. “They may have made sense in the industrial economy, but they don’t make any sense now. [For example,] a supervisor on the shop floor of a factory is making $15 an hour and he is a bonafide supervisor. But then you may have a high-tech sales person making hundreds of thousands of dollars a year, and it’s not at all clear that he is exempt,” O’Meara says. “The wage and hour laws are badly in need of overall reform, and I don’t know that this administration is going to do it. Companies are paying out seven- and eight-figure settlements all the time.”

What would help, he adds, is a law making anyone with base compensation of $75,000 a year or more exempt. “If you pay someone that much, if you are guaranteed that amount of money, you don’t get overtime.”

Laws, however, can’t regulate the impulses of over-ambitious employees. Wharton management professor Matthew Bidwell points out that the bleeding of work life into personal time is often more a function of wanting to get ahead of other workers than a management mandate. “There are probably not many organizations where the employer requires that sort of thing,” he says, “But it is a good thing to demonstrate your commitment, and one way to demonstrate your commitment is this always-responsive culture. You get into this rat race, which is everyone else is doing it so you feel you need to do it to keep up.”

Hence, companies in some cases turn off email servers over the weekend in an effort to force their employees to disconnect. Some studies have shown great benefit to drawing bolder boundaries around work life and home life. Harvard leadership professor Leslie A. Perlow conducted a study in which employees at a consulting firm rotated evenings when they were expected to not check smartphones, while others covered for them.

“What she found was that it led to greater commitment; the client was just as happy and there was less turnover,” says Rothbard. “And there was this bonus: Because the team members needed to cover [for each other], the team as a whole had a better mental model of what was going on collectively and ended up being able to collaborate better and deliver better value because they knew what the others were doing. So the metric they used was whether the client was satisfied with the product.”

Rothbard says that at the moment, there is no consensus about when to work, where to work or the number of hours one is expected to work. It may take several visible employers demonstrating successful change before others hop on board. “There are some companies that are saying, ‘We want you to engage in recovery and engage in acts that re-energize you,’ and other companies that are either not clear about what they expect, or they expect the complete opposite,” she says. “It’s almost the Wild West of policy-land out there Twitter .”

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