News & Commentary March 7, 2023

[Omaha Steve]

https://onlabor.org/march-7/

By Iman Masmoudi

Iman Masmoudi is a student at Harvard Law School.

Studies show an increase in the use of “manager” titles to skirt overtime pay; the Whitney Museum of American Art reaches an agreement with its unionized workers; and a history of forced labor comes to the fore in Korea-Japan relations.

The NYTimes reports on a growing set of studies that are uncovering a deceptive employment practice keeping workers from their overtime pay. Federal law does not require overtime pay for salaried employees making above $35K in managerial positions. Over the past several years, many employers have responded by mislabeling rank-and-file workers as managers or assistant managers. A paper by Lauren Cohen, Umit Gurun, & N. Bugra Ozel found “widespread evidence” of this practice, and noted that at the $35K threshold, there is almost a five-fold increase in managerial titles, including “Director of First Impression” for positions akin to front desk assistants, for example. The paper also shows that firm bargaining power, financial constraints, and overtime penalties all increased the frequency of such practices. The results lead to an estimated 13.5% wages avoided for firms who employ this practice.

FULL story at link above.