This paper offers a contract-based theory to explain the determination of standard hours, overtime hours and overtime … premium pay. We expand on the wage contract literature that emphasises the role of firm-specific human capital and that … explores problems of contract efficiency in the face of information asymmetries between the firm and the worker. We first …

pay, to shed light on the effects of the resulting greater flexibility in overtime pay setting. We find that half of the … pay flexibility to promote employment, even during a downturn. …