A university study concludes businesses, including many retailers, are increasingly giving workers promotions with “fabricated” managerial titles but no wage upgrade to avoid paying them overtime wages.
Researchers from Harvard University and the University of Texas-Dallas believe firms are exploiting a loophole in the Fair Labor Standards Act first established in 1938 after the depression.
The act established a national minimum wage, a standard 40-hour work week and time-and-a-half pay for weekly work past 40 hours.
In its current form, however, businesses don’t have to pay overtime wages to employees who are salaried managers, making more than $455 per week (or $23,660 per year).
Analyzing online job postings and compensation data from 2010 through 2019, researchers found a 485 percent surge in the use of managerial titles for salaried positions with earnings only slightly above the $455-a-week threshold. The overtime-exempt employees were found to share the same job tasks as equivalent non-managerial employees.
Some examples of “suspect” salaried job-listing postings offered included:
The study estimated the use of deceptive job titles saved companies 13.5 percent in overtime expenses for each so-called manager. The study stated the “incredibly high ROI on this activity of...
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