Warren, Brown probe employers’ use of ‘manager’ title to avoid overtime

Two prominent liberal Senate Democrats launched an investigation Tuesday into whether more than two dozen major companies have used “manager” job titles and other tactics to avoid paying workers overtime.

The probe by Sens. Elizabeth Warren, D-Mass., and Sherrod Brown, D-Ohio, follows the release of a report that found that many employers in the United States offer positions labeled “manager” with salaries just above the federal overtime cutoff to avoid paying overtime.

Federal labor law requires companies to pay hourly workers overtime – or 1.5 times their regular earnings – when they work more than 40 hours in a given week.

Salaried workers who earn less than the federal threshold of $35,568 a year also qualify.

But employers do not have to pay overtime to bona fide managers who make more than that threshold.

“Wage theft is illegal, period, and that includes abusing the label ‘manager’ to avoid paying workers the overtime that they are entitled to,” Warren told the Washington Post.

“I want answers from these companies about their overtime avoidance tactics – and they must immediately pay workers the overtime pay they have earned.”

The senators are scrutinizing 24 companies – including Burger King, Subway, Pizza Hut, Arby’s, H&R Block and Life Time Fitness – that were identified by the report as having the highest share of “overtime avoiding positions.”

Warren and Brown asked the companies to share internal data on the number and percentage of workers treated as managers and their pay.

The senators have requested responses from companies by July 11.

The companies did not respond to the Post’s requests for comment.

The paper, released by the National Bureau of Economic Research think tank, found that between 2010 and 2018, manager titles in a large national database of job listings were almost five times more common for salaried workers paid at or slightly above the federal cutoff for overtime, compared with those who were paid slightly less than the overtime minimum.

The report cited job titles such as “director of first impressions” for receptionists and “guest experience leader” for restaurant hosts as examples of commonly misclassified roles that are low-paid and often involve manual labor while excluding management duties.

The report’s authors estimate that by mislabeling workers, U.S. employers avoid roughly $4 billion in overtime payments per year.

Individual workers misclassified as managers lose an average of $3,200 a year, or 13.5% of their annual salary, the researchers said.

Warren and Brown are pursuing the probe outside the authority of any Senate committee, giving them no formal investigative power.

But the senators have previously drawn national attention to labor abuses at companies such as Amazon, Uber and Starbucks.

In 2020, Warren pressured the country’s top meatpackers into disclosing information about the spread of coronavirus in their facilities.

Employers have paid tens of millions of dollars after being accused of misclassifying employees to avoid overtime pay.

In 2019, JPMorgan Chase agreed to pay $16.7 million in a settlement over a lawsuit that accused the company of mislabeling assistant branch managers in banks nationwide and failing to pay overtime.

JPMorgan did not immediately respond to a request for comment.

The country’s largest Panera Bread franchisee paid $4.6 million in 2020 to settle a lawsuit filed by assistant managers in Ohio who alleged that they were forced to work without overtime pay after being misclassified.

Panera did not respond to a request for comment.