Did you know that job promotion might just mean a smaller paycheck for the same job? US Federal law says time-and-a-half is for ordinary laborers, and management is exempt from overtime provisions. So congratulations, as a shop “manager,” you no longer qualify for overtime—but still end up doing basically the same work for less. For example, the senior shelf stocker at Big Box store may be required to spend a few weeks a year training new hires. Then her boss “promotes” her by slapping on a new middle-manager name tag that automatically disqualifies her from time-and-a-half. Meanwhile her daily schedule and general duties at the store remain unchanged. So the “white collar” exemption, originally intended for affluent professionals, invites the dubious recasting of front-line workers as “managers” by essentially swapping uniforms without expanding authority or compensation.
Generally, federal labor law requires elevated wages for hours worked over the standard 40-hour week. But in the precarious low-wage economy, advocates say employers are hyper-exploiting the system to skirt fair labor laws, and overtime is fast becoming a relic of the past.
According to a report by National Employment Law Project (NELP), the Fair Labor Standards Act exempts “white collar” supervisors or managers from overtime, and effectively allows bosses to exempt even poverty-wage workers.
A manager at an Alabama Dollar General store, worked 50-to-70-hour weeks overseeing several employees and handling scheduling and payroll. But because the chain kept the store understaffed and under-budgeted, she had to do double duty, spending her excessive hours mostly “performing non-managerial tasks…working the cash register, performing inventory, and unloading freight, none of which were managerial tasks.”
To qualify for the “white-collar exemption,” a worker must earn at least $455 a week (the level below which overtime always applies) and have a fancy title like “executive” or “administrative.” But this “white collar” income threshold amounts to a poverty-level annual income today; back in the 1970s, in contrast some two-thirds of workers qualified for overtime. Additionally, NELP reports, “current regulations afford too much leeway for employers to misclassify employees who are not truly managers in any meaningful sense of the word or who do not exercise independent discretion.”
“Because of that little bit of managerial and supervisory work they do, they lose out on that extra pay that they should have,” says NELP Federal Advocacy Coordinator Judith Conti. In turn, “they don’t have extra hours to spend with their family or in their own lives…. It’s really a big loophole and a way to game the system.”
NELP recommends (1) raising the weekly overtime income threshold to at least $984 and as high as $1,327 ($69,004 yearly) and (2) limiting exemptions to workers who “truly exercise independent judgment in performing the job.” Along with preventing the social damage of overwork on people,overtime benefits the whole workforce by ensuring that non-standard extra hours demand more expensive pay scales. In tandem with a minimum wage, this wage premium anchors a social consensus around what people should reasonably expect from their jobs.
With so many workers employed on a part-time, contract, or “on call” basis, pushed to labor “off the clock” while bosses skirt wage and hour protections. The unemployed suffer as well. When they can circumvent labor standards, bosses may see overwork or marginal part-time hires as more cost-efficient than creating more full-time or better-paid positions. NELP explains, “if there is so much work to be done that more than 40 hours per week from staff is regularly necessary to accomplish it, the overtime premium creates an incentive for employers to hire more people, rather than overworking their existing employees.”
It’s true that some workers want overtime hours to supplement income. But that’s often a problem of wages being too low for their regular hours. That’s why we should look ‘crazy’ ideas like encouraging collective bargaining and raising the minimum wage. “The higher your wages are, the more likely you can support yourself and not want the overtime,” Conti says, while among the un- and underemployed, ”all of these folks who are now perhaps cobbling together all of these part-time jobs maybe can get a full-time job with benefits instead.”
With the modern economy, the traditional workday, overwork, sadly, becomes part of many job descriptions. Those under-compensated hours could be better spent in truly worthwhile ways: spending time with family, pursuing education, or just resting. Workers could revive the principle of the “eight hour day.” Or better still, how much more complete our lives could be, if we didn’t waste time chasing that paycheck that never quite adds up and actually did away with waged labor or as Marx said “Instead of the conservative motto: “A fair day's wage for a fair day's work!” they ought to inscribe on their banner the revolutionary watchword: “Abolition of the wages system!”