A lesson from history

Kaplan et al., are not the first to explore the issue of work hour reductions, as regulatory efforts have long sought to address this concern. For example, the United States’ Fair Labor Standards Act (FLSA) of 1938 imposed an obligation for employers to provide additional compensation for employees working more than 40 h per week, unless those employees were classified as exempt under the executive, administrative, or professional (EAP) categories of the FLSA. Noncompliance with this regulation could result in legal liabilities for both the employer and the responsible manager (Pollack, Reference Pollack2001). Although the FLSA aimed to regulate excessive work hours by imposing financial penalties, its effectiveness in achieving sustained work hour reductions has been limited. Recent data indicate that more than half of Americans report working over 40 h per week, with 18% estimating that they work more than 60 h per week (Time Ideas, 2022). When accounting for responding to phone calls and emails outside of work, many executives even report working more than 70 h per week (Deal, Reference Deal2013). Managers in industries such as retail are often scheduled to work nearly 50 h per week, excluding additional unplanned hours. Not only does overtime work remain prevalent, but the FLSA’s mandate to compensate employees for overtime hours may actually result in the shifting of work from those who would receive compensation to those who do not. Some estimates suggest that collectively, American workers classified as exempt under the FLSA work approximately 9 unpaid overtime hours per week (Time Ideas, 2022).

This persistence of unpaid overtime in the United States likely endures—despite the FLSA—due to a combination of regulatory inefficiencies and managerial exploitation of ambiguities in the law. For example, before recent regulatory updates, the percentage of salaried employees in the United States who were eligible for overtime compensation per the FLSA was one-fourth of what it was in 1975 (Time Ideas, 2022). Ambiguities in defining EAP employees under the FLSA have further facilitated employee misclassification. This issue is exemplified by recent allegations against 23 companies (e.g., Burger King, Dairy Queen, Jiffy Lube) accused of misusing the term “manager” to avoid paying overtime wages (Stone, Reference Stone2023). Although the FLSA successfully reduced work hours for some employees and ensured fair compensation for others, it also had unintended consequences. By increasing employment costs for employers who assigned more than 40 h of work to employees, the act inadvertently incentivized organizations to (a) misclassify workers as exempt from the FLSA and (b) reassign work to exempt workers who could be required to complete additional work for no additional pay, thus undermining the intended protections of the legislation.

Drawbacks of work hour regulations

Even if such regulations would not be undermined—whether intentionally or unintentionally—and would successfully manage to regulate and limit employee work hours, potential adverse effects would persist. For instance, creativity, being inherently unpredictable, often requires individuals to work outside conventional hours when inspiration strikes, making rigid limitations on work hours potentially counterproductive for fostering innovation. Research shows that creative problem solving benefits from the ability to work in flexible environments that allow for spontaneous bursts of productivity (Bousinakis & Halkos, Reference Bousinakis and Halkos2021; Cannon, Reference Cannon2017). Imposing rigid work-hour limits could hinder creative professionals by confining their working times, which may not align with their natural periods of peak productivity. For example, in industries such as advertising, software development, and media, where creative breakthroughs often happen after extended work periods, such restrictions could reduce the likelihood of creative and innovative outcomes. Moreover, working long hours is sometimes necessary to achieve becoming an expert in any field (Gladwell, Reference Gladwell2008). Reducing hours could undermine this effort, particularly for professionals aiming to hone their skills in areas requiring deep expertise, such as research, art, and technology.

Furthermore, in a world increasingly interconnected by technology, global collaborations are essential to innovation and economic competitiveness, and work hour regulations may hinder the flexibility needed to support such cross-border cooperation. Industries such as finance, technology, and academic research require professionals to interact across multiple time zones. For example, large multinational companies like Google or Microsoft rely on distributed teams working in different time zones, necessitating flexibility beyond traditional 9-to-5 schedules. Strict work-hour regulations would make it difficult to coordinate across time zones, particularly in sectors that require fast decision making and real-time problem solving. As companies expand their operations globally, they also rely on the adaptability of their workforce to meet international deadlines (Omar et al., Reference Omar, Davis-Sramek, Myers and Mentzer2012). A rigid and fixed work-hour structure may hinder real-time communication between teams located in different parts of the world. As another example, global financial markets operate across multiple time zones, and key decisions are often made outside standard working hours to respond to international trends. Reduced hours would likely mean fewer opportunities for real-time global interaction, potentially making businesses less agile and competitive on the global stage (Chauvin et al., Reference Chauvin, Choudhury and Fang2024).

Entrepreneurship is another area where reduced work hours can have adverse effects. New business ventures, particularly startups, require intense dedication, long hours, and a hands-on approach during the early stages of growth. Many entrepreneurs work well beyond the 40-h workweek, often putting in 60 or even 70 h to ensure their business succeeds (Gruber & Johnson, Reference Gruber and Johnson2019). The limitations imposed by a reduction in work hours could slow down business development and hinder the growth of startups, which are crucial drivers of innovation and employment. Countries with a vibrant entrepreneurial culture, such as the United States, have seen the benefits of long, flexible work hours, where executives and employees often go the extra mile to innovate and drive economic growth. Imposing work hour restrictions could reduce the ability of startups to thrive in their formative stages, ultimately leading to fewer innovative products and services being brought to market.

Taken together, work hour limitations and regulations may significantly hamper productivity and competitiveness. These concerns are supported by real-world examples, where countries with strict work-hour regulations have experienced notable challenges in maintaining productivity and competitiveness. For example, research from Germany, which imposed regulations limiting the working week to a maximum of 48 h under the Working Time Act, reveals that businesses struggled to maintain a competitive advantage, especially when dealing with global partners not bound by similar restrictions (Lott & Chung, Reference Lott and Chung2016). Similarly, France’s 35-h workweek policy, implemented to reduce unemployment and improve work–life balance, produced adverse outcomes. Although the policy was intended to encourage companies to hire more workers, it did not significantly boost employment, and many businesses reported declines in productivity and increased administrative burdens (Cahuc & Carcillo, Reference Cahuc, Carcillo and Zylberberg2014; Estevão & Sá, Reference Estevão and Sá2008). Additionally, the restricted work hours were found to limit business growth, especially in sectors like technology and finance, which rely heavily on creativity, global collaborations, and extended work periods.

Even in cases where work-hour regulations appear beneficial, it is important to acknowledge that employees and employers may find ways to circumvent them. For instance, companies that ask employees to log and communicate their work hours through tracking systems may still encounter unreported overtime. Employees might feel pressured to work additional hours off the record to meet performance expectations, fearing negative repercussions if they disclose the full extent of their working time. This can create a hidden culture of unpaid overtime, where formal regulations are undermined by informal practices. Such behavior, though subtle, would ultimately perpetuate the very problems these regulations seek to address, making it difficult to fully measure their effectiveness.

Final thoughts

Reducing work hours and implementing stricter government control over them may appear beneficial on the surface but poses substantial risks to productivity and competitiveness. Creative industries rely on the flexibility to work when inspiration hits, global businesses need adaptability across time zones, and entrepreneurs must often work long hours to get their ventures off the ground. Historical examples and empirical research indeed suggest that such policies could stifle productivity and innovation, creating more problems than they solve. Any future consideration of work-hour reductions must be carefully balanced with the realities of globalized industries and the need for innovation-driven growth. Although regulating work hours to align with Keynes’ vision may sound enticing, we must grapple with the reality that the demands of today’s world differ from those of Keynes’ world.