Posts Tagged "restaurant"

Employers Routinely Avoid Paying Overtime

Walk into a restaurant, retail store or hotel, and you might encounter a manager who seems to be doing the same tasks as the people he’s managing. Maybe you’re in one of those jobs.

A lawsuit by employees against a retail store revealed how meaningless the title of manager can be: the store managers were “stocking shelves, running cash registers, unloading trucks and cleaning parking lots, floors and bathrooms.” Hardly the types of responsibilities that go with overseeing one’s coworkers.

The employees were suing for overtime pay under a Depression-era federal law to receive back pay for overtime when they worked more than 40 hours per week.

Employers are exempt from paying overtime under this rule, however, if the employee is a manager earning more than $35,568 per year, rather than an hourly wage. One last requirement to qualify for the overtime exemption is that employers must give the worker executive or administrative duties that include supervising others on the job.

To satisfy the amorphous definition of who qualifies as a manager, new research finds that U.S. employers are much more likely to come up with creative, “fake-sounding” managerial titles – bingo manager, food-cart manager, director of first impressions, carpet-shampoo manager, and lead shower-door installer – for jobs paying just above the overtime pay threshold.

Employers “strategically use job titles to exploit regulatory [pay] thresholds,” which saves more than 13 percent for each manager who qualifies as exempt from the overtime rule, said the researchers, who include a Harvard Business School professor. The practice is “systematic” and saves U.S. employers some $4 billion in payroll costs every year.

The situation for workers used to be worse, however. Millions more became eligible for overtime pay when the pay threshold was increased 50 percent, to $684 per week – or $35,568 per year – in January 2020, from the $455 per week rate in place at the time of this study. …Learn More

How Long Can Low Wages Outrun Inflation?

Waitress serving family after the COVID reopeningFederal labor officials are giving Amazon employees in Alabama a second shot at forming a union, and their coworkers in Staten Island are seeking clearance to hold a vote. Americans, more confident of their employment prospects, are leaving their jobs in record numbers, with much of the activity in low-wage industries like hospitality.

Employers, having taken note, are combatting high quit rates and staff shortages by raising pay at the bottom of the wage scale. Also fueling the hikes has been a series of increases in state minimum wages, including automatic annual cost-of-living increases in a growing number of states.

Various economists, using different data sources, have reached a similar conclusion about these recent developments: pay for low-income workers – the same people who suffered the highest unemployment rates during the pandemic – is currently outpacing inflation.

It’s unclear whether that trend will continue in 2022, if, as some economists now predict, inflation becomes more persistent. The government will report December’s inflation rate tomorrow.

But between the third quarters of 2020 and 2021, Arindrajit Dube, at the University of Massachusetts at Amherst, estimated that wage increases for workers in the bottom 30 percent of the pay scale outpaced inflation. Another economist, Geoffrey Sanzenbacher at Boston College, reached a similar finding: inflation-adjusted pay for people with earnings in the bottom 25 percent of all earnings rose last year while workers in the top 10 percent saw a decline.

When inflation first started picking up, economists said it would be a temporary blip that would ease when the goods piled up at West Coast ports started moving onto store shelves. But some economists are changing their tune and worry that high inflation will last longer than they’d predicted.

This would especially be a problem for low-wage workers, who spend most of their income on necessities. Rental housing is a good example. In a recent Federal Reserve survey, consumers estimated their rents would rise by 10 percent over the next year. An increase of this size would mark a new high for low-wage workers’ largest single expense – rent consumes more than half of their monthly income. …Learn More