work life Did Your Boss Give You A Phony Title To Save A Few Bucks? Some companies use the tactic to bypass overtime laws. Tenor
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When employees think about what they want from a job, there are often a few answers that come to mind — but at the top of most lists is fair compensation for their work. On the other hand, many executives and managers are motivated by the desire to save money wherever possible.

Instead of giving out raises to show their appreciation, a growing number of bosses appear to be opting for virtually meaningless gestures like changing an employee’s title to something that sounds more prestigious.

Working more and making less

Throughout our current inflationary period, employees in many sectors of the economy have not seen their wages increase by the same amount as consumer prices. At the same time, countless workplaces have expected employees to put in extra time — on or off the clock — to meet increased demands.

According to a new report by researchers at the University of Texas and Harvard Business School, inflated job titles have become a reliable way for some companies to get more out of workers without forking over any more dough.

In a nutshell, here’s how it works:

  • Hourly employees must receive overtime pay by law, but salaried managers are exempt.
  • By “promoting” hourly workers to made-up managerial positions (with the same duties), shady bosses have found a cost-cutting loophole.
  • The practice is believed to save companies somewhere in the ballpark of $4 billion per year.
  • Workers with these fake titles make about 13% less than if they’d stayed hourly.

The authors of the paper said they were inspired to conduct the study after overhearing the conversation of two airport employees.

“One said, ‘I don’t complain because I get overtime,’” UT professor Umit Gurun explained. “The other guy was a manager, so he didn’t. But they were doing exactly the same job.”

Chris Agee
Chris Agee February 3rd, 2023
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