Fighting for Fair Pay

Managerial Misclassification

The NY Times recently highlighted a new trend in wage theft – misclassifying workers as managers, and then the employers claim the managerial exemption and deny workers overtime pay.

“The extent to which employers game the overtime system was made starkly clear in January in a working paper published by the National Bureau of Economic Research. The title says it all: ‘Too Many Managers: The Strategic Use of Titles to Avoid Overtime Payments.’ ‘Food cart manager,’ ‘price scanning coordinator,’ ‘carpet shampoo manager,’ ‘lead shower door installer,’ ‘grooming manager’ and ‘director of first impressions’ (for a front desk clerk) are some of the ‘fake-sounding’ titles uncovered by the authors, Lauren Cohen of Harvard Business School and Umit Gurun and N. Bugra Ozel of the University of Texas at Dallas School of Management.”

In general, most salaried workers earning less than $35,568 a year, with some exceptions. Some states, like New York, have an even higher salary threshold. For example, some workers must be paid a salary of $58,500 or more to qualify for an exemption from overtime. The paper has found that the number of job listings with managerial titles are “almost five times as common just above the salary threshold as just below it – which seems to be prima facie evidence that employers are gaming the system by handing out bogus titles.”

Getman, Sweeney & Dunn is ready to stand up to companies exploiting workers through bogus titles and denying them the pay they deserve.

Click here to read the full opinion piece.