Report Bosses Give Workers Bullshit ‘Manager’ Titles To Avoid Paying Overtime: Study

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Getting a fancy new position at work is typically thought of as a good thing—a sign that someone is progressing in their career—but a new study shows that firms of all types and sizes are giving workers phony managerial titles in order to avoid paying them overtime in what researchers see as an exploitation of federal labor laws.

When it was enacted during the New Deal in 1938, the Fair Labor Standards Act set overtime pay rules in order to discourage overwork, encourage hiring, and let workers benefit when they logged extra hours. But it also allowed firms to avoid paying overtime to salaried managers whose pay exceeded a set threshold.

“If you are a manager and you're paid over a certain amount, in fact, that lifts the burden of firms having to pay you overtime,” said Lauren Cohen, a professor at Harvard Business School and one of the paper’s authors.

The logic at the time of the law’s creation was that managers are a special class of employee with a particular stake in the company’s future success. But today, many such workers are managers in name only, and the national threshold is only $455 a week, or under $24,000 a year. Cohen and his fellow researchers scoured job listings in the 2010s and discovered that right above that weekly $455 threshold, there was a 485 percent increase in the number of salaried positions with fancy-sounding managerial titles. “We were shocked at the magnitude,” said Cohen.

 
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