The Regulatory Hour: The History, Law and Economics of Minimum Wage and Maximum Hours Legislation
For over one-hundred years the legal regulation of minimum wage and maximum hour laws has struggled to find an appropriate answer to two questions. First, what counts as a regulated hour, and second, who counts as a covered employee? The traditional economic analysis of these laws assumes that all hours are homogeneous, i.e. impose the same cost to workers and provide the same benefit to employers. Historically, a variation in the work intensity of different hours has led to immense complications in the administration of the law, including key cases like Lochner v. New York (1905) and Skidmore v. Swift & Co. (1944), both of which trip up in deciding how to include hours sleeping on the job into the relevant calculations. These issues have carried forward into modern law dealing with other types of variable pay schedules distinct from what is seen in industrial plants, with the rules being applied to such groups as interns, research assistants, start-up employees, and workers in the gig economy, all of which have been subject to extensive litigation.
This historical evolution involves the interaction between substantive rules and administrative regulation. It also shows the shaky underpinnings of the minimum wage and overtime regulations, where the adverse consequences often spill over into the legislative arena, and constitutes a strong, if overlooked argument for their repeal. But even though these federal and state statutes are now treated, courts and administrators should construe them in ways that make categorical distinctions between covered and uncovered workers, for a system of ad hoc individual determinations creates untenable levels of uncertainty in a mass economy, uncertainty that can only be alleviated by clear per se rules that keep these marginal categories out of the class of employees.
