WeWork used legal loophole to deny workers overtime pay: report

Co-working company classified low-level jobs as managerial positions
May 09, 2017 08:45AM

Inside a WeWork space (Credit: WeWork)

UPDATED, May 8, 6:30 p.m. WeWork used an exemption in federal labor laws to deny its employees overtime pay, according to a report.

The U.S. Labor Department requires employers to pay higher wages for any hours worked beyond 40 hours per week. But these rules don’t apply to so-called managerial jobs, or positions where workers independently make key decisions for the business. Bloomberg reported that the co-working company for years used that exemption by branding low-level jobs as managerial positions, thus avoiding overtime payments.

WeWork claims that associate community managers do, in fact, carry plenty of managerial responsibilities, and points out that other low-level jobs at the company such as receptionists qualify for overtime pay.

Rachel Wynn, a former so-called associate community manager at WeWork in Washington D.C., told Bloomberg that she spent much of her time giving office tours, brewing coffee and fixing printers. But she was still expected to work long hours without overtime pay. “Because I had manager in my title, I thought that part of my job was staying late,” she said. “I didn’t know it shouldn’t be that way.”

Last year the labor department issued a new rule that any job paying $47,476 or less could no longer qualify as a managerial position, meaning any extra hours would have to be compensated with overtime pay. A month before the rule was supposed to go into effect, WeWork raised the annual pay for associate community managers to $50,000, pushing it above the threshold. A judge ultimately blocked the rule change.

Wynn said she plans to sue WeWork for lost wages.

WeWork, which was valued at more than $17 billion during a recent funding round, has been battling controversy over work conditions at its locations since at least 2015. That year, cleaning workers protested the company over its use of nonunion contractors that allegedly paid wages as low as $10 per hour. [Bloomberg]Konrad Putzier