The overall effect of “managers” making just over $455 isn’t a small one. There’s “a 485% increase in the usage of managerial titles for salaried employees just above the salary threshold set in the Federal Labor Standards Act ($455/week)—allowing the firms to avoid paying overtime compensation to these workers,” and it’s costing workers around $4 billion in overtime every year.
Here’s how it goes, and how we can be pretty sure this is a real effect: The authors found that the share of workers with managerial titles spikes among those being paid just over $455 a week. People making $455 to $480 a week are more likely to have managerial titles than those making $480 to $505 or $505 to $530.
Not only that, there are five states where the overtime threshold is higher. In those states, the researchers didn’t see the same spike of managerial titles right at $455. Similarly, jobs with hourly or daily pay rather than salaries don’t show a jump in managerial titles at that significant pay level. And it also happens more in states where employers have more power and workers have less.
In other words, these authors have assembled very strong evidence that companies are cheating their workers out of overtime pay by giving them fancy, if fake-sounding, titles but the lowest possible pay. Workers should be able to challenge this, showing that their duties aren’t really managerial, and so, even at a $ 455-a-week salary, they should be eligible for overtime. But that relies on workers knowing the exact standards their duties do or don’t meet and knowing which oversight agency to contact. Employers can make a pretty good bet that they’re not going to be called on it.
As president, Barack Obama tried to double the overtime eligibility threshold from $23,660 to $47,476, but his move was predictably blocked by a right-wing judge late in 2016. The Biden administration has indicated it plans some action on this front in 2023, but the details aren’t yet public. In the meantime, this is one of several major forms of wage theft that add up to employers stealing more from their workers every year than all robberies put together.
