Pop quiz. Which of these titles come from an actual job listing?
a. Lead Reservationist
b. Carpet Shampoo Manager (Trainee)
c. Director of First Impressions
d. All of the above
If you picked D, congratulations: you’ve found the latest way US companies are exploiting labor laws, according to research published this week. A new report in the National Bureau of Economic Research finds that companies have been assigning made-up manager titles to people who aren’t actually managing anyone, all in an attempt to avoid paying overtime.
(The director of first impressions, by the way, is what we know as a front desk worker.)
Why titles matter, plus how they impact your pay
The Fair Labor Standards Act, or FLSA, mandates overtime for all non-manager workers under a certain salary threshold—$455 per week at the time studied, and now $684 per week.
Looking at salaried manager listings from 2010 to 2018, the research found a 485% increase in listings just above that threshold, many of which didn’t actually include the responsibilities of a manager. So what does the jump suggest? A pattern of companies creating suspect manager titles at threshold-meeting salaries to evade overtime regulations.
The lead reservationist listing, for one, had the duties of a reservation clerk, and the carpet shampoo manager-trainee listing actually corresponded to that of a carpet cleaner. There was more title scope-creep, too. A receptionist role was listed as a front desk manager. A host role was listed as a guest experience leader. There was even a listing for an assistant bingo manager.
While the practice is most often found in the food service and retail industries, it’s made its way into the office, too. Companies like Meta (formerly Facebook), Goldman Sachs, and JPMorgan Chase & Co have all faced lawsuits for overtime misclassifications. Client solutions managers, human resources managers, and more have alleged that they were denied overtime.
“We were surprised at how ubiquitous it was across industries,” says Lauren Cohen, a business professor at Harvard University and one of the paper’s co-authors. The misdeeds are happening everywhere. And there’s big money involved: companies engaging in the practice avoid paying about $4 billion in overtime wages per year. Cohen says seeing those practices may have encouraged other companies to try.
“[Meta] observes JPMorgan, and Staples, and Lowe’s, and Dollar Tree,” Cohen says, referencing the cascade of practices surfaced in a number of labor lawsuits dating back to 2008. “So they know this is something that [they] could get litigated for, and yet they still find it optimal to do it.” He advocates for an update to the FLSA, one that moves from pay based on job titles to pay based on tasks.
What to do if your title and duties don’t match up
What steps can you take if you think you’ve been given a title that doesn’t correspond to your actual role? The first step is to head to an HR manager, or whoever heads up titles, promotions, and pay at your job. It could be an honest oversight, Cohen says. You may also want to consult the worker protections in your state: overtime skirting is more common in places with weak protections.
If the issue isn’t rectified, it’s time to find a labor lawyer. “This happens enough that there are lawyers that know [overtime wage theft] incredibly well,” Cohen says. Overtime malpractice isn’t slowing.
“We think this is the tip of the iceberg,” Cohen says. The companies we know of, he adds, are only the ones getting caught.
This story has been updated.