Companies save billions by giving employees fakes


Are you more of a front desk clerk or “director of first impressions”? A barber or a “grooming manager”?

How you answer can make a big difference in your annual income. Researchers at the University of Texas and Harvard Business School say that companies routinely inflate their employees’ titles to avoid paying them full overtime.

It’s no secret that companies go to great lengths to keep labor costs way of working paper We found that companies could save a total of $4 billion a year in overtime just by improving their titles. But for an employee, these inflated titles earn him 13% less pay than he otherwise would.

“If you’re relying on cheap labor, you’re a labor-intensive company and you can get away with it. This will be a tool you can use to keep costs down.” 1 person.

Gurun and co-author N. Bugra Ozel said of the study, published by the National Bureau for Economic Research, when they overheard two workers discussing flight delays while traveling through the airport. I said I had an idea.

“One said, ‘I’m not complaining because I’m working overtime.’ “But they were doing exactly the same job.”

After that discussion, researchers began noticing dozens of examples in the news. It wasn’t hard: Workers have filed lawsuits against some of the biggest employers in the US. bank of america, family dollar, JP Morgan Chase, Starbucks and UPSCompany sued wage theft Above all, except workplace health and safety violations.

The $15 Billion Problem in America’s Workplace


fall through cracks

These lawsuits focus on the idiosyncrasies of US wage law. In general, companies must pay a worker 1.5 times her hourly rate when she exceeds her 40 hours in a week. However, there is an exemption for salaried managers who receive the same salary each week as long as they earn above a certain minimum. During the period analyzed by the authors, the cutoff for qualifying for OT was $455 per week. This equates to an annual income of $23,660.

For this paper, Gurung and his co-authors analyzed the job listing database of labor analytics firm Burning Glass Technologies from 2010 to 2018, paying particular attention to those listing managerial positions. . They found that the incidence of false-sounding manager titles spiked at the legal threshold of $455 a week. This is the exact threshold at which companies are allowed to charge their employees and circumvent the OT payment law.

“There is a systematic, steady and sharp increase in the use of managerial positions by firms around the threshold of federal regulation that allows overtime payments to be avoided,” the paper concludes.

According to researchers, these unconventional manager titles include food cart manager, price scanning coordinator, carpet shampoo manager, reed shower door installer, director of first impressions, guest experience leader, and grooming manager. .

In particular, this pattern did not exist for states with different salary standards for OT, nor for hourly-paid managers, so companies are doing this strategically to avoid paying overtime, he said. My thoughts have strengthened. The paper also found that inflated managerial titles were more common in states with weak labor laws, low union membership and high unemployment.

ambiguous title

Hourly workers are well aware that flashy titles can be used to disguise underpaid wages – and so are regulators. It warned that the system would likely be abused if allowed to be exempted from the full amount.

“Titles come cheap,” wrote one insider. “[I]It’s not hard to call a janitor a ‘supervisor’ or a ‘maintenance supervisor’ if it produces the desired results for the user. ”

But the company continues its strategic title hoax. In 2019, the year the Labor Department garnered $226 million in unpaid wages for deceived workers, companies are blaming their frontline workers for their regular jobs by referring to them as “managers.” I saved about 18 times the amount.

“incredibly high [return on investment] This practice of avoiding overtime pay explains why companies in every industry, from Staples to JP Morgan, Facebook, Walmart, Verizon, Avis, and Lowe’s, still engage in this practice to this day. maybe. ‘ said the paper.


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Written by Natalia Chi

Chicago Popular; Chicago breaking news, weather and live video. Covering local politics, health, traffic and sports for Chicago, the suburbs and northwest Indiana.

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