Congratulations on your new role as manager. But before you celebrate, you may want to ask your boss a few questions—and do some quick math.
Employers are increasingly giving workers phony job promotions and creating lofty-sounding managerial titles to avoid paying overtime wages. That’s according to new research from a trio of economists at Harvard University and the University of Texas-Dallas who reviewed online job postings and compensation data from 2010 through 2019.
The same Depression-era law that established a national minimum wage and a 40-hour work week created overtime pay regulations to discourage companies from overburdening employees and encourage job creation. There’s a bit of a loophole in the Fair Labor Standards Act, however, and in its current form the regulation allows businesses not to pay overtime wages to employees who are salaried managers, making more than $455 per week (or $23,660 per year).
Over the 10-year period, researchers found a 485% surge in the use of misleading managerial titles for salaried positions with earnings only slightly above the $455-a-week threshold. “Our results suggest broad usage of overtime avoidance using job titles across locations and over time, persisting through the present day,” the study concludes.
This use of deceptive job titles ends up saving companies nearly 14% in overtime expenses for each so-called manager, the researchers found.
Some examples of potentially sketchy job-listing language, according to the...
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