Featherbedding is the practice that requires an employer to hire more employees than needed or paying more to the employees for the work, the employee considers unnecessary work or for work which is actually not performed. The occurrence of featherbedding in any particular instance is usually disputed and is subject to what is considered reasonable. Work rules requiring large work crews or which limit the amount of work an employee can do in a specific time period may be considered featherbedding.
Introduction of featherbedding provisions in labour agreements may result from the extension of work rules that were once efficient but which now have become obsolete because of updated or new technology. A labour union may assert on the continuation of such work rules to ensure that its members have a secured employment. Many economists have argued that featherbedding is the most economically ideal position from both an employer's and employee's viewpoint.
Featherbedding only arises under certain circumstances. Principal among these is that the employer has an exploitable excess (e.g., profit) to support the practice. Featherbedding also emerges where market forces fail and organizations are allowed to be non-competitive. Under this analysis, businesses which are already inefficient and featherbedding has no effect on the production. Featherbedding can, in some conditions, take surplus resources (profits) away from the employer and distribute them to workers in the way of more income per worker or more numbers of employees at the similar income level. Featherbedding is considered economically effective because it happens in the reciprocity (give and take) of collective bargaining.
For example a labour union notifies an employer that it has to hire ten people and that if it hires only seven, it must pay for the additional three employees anyway.