Takin' Care of Business and Working Paid Overtime

theodp writes "About 800 CA-based Siebel employees who held the job title 'software engineer' or 'senior software engineer' stand to pocket $27,000 each from the proceeds of Siebel's $27.5 settlement of an overtime dispute. And while IBM's 32,000 techies won't make out quite as well, they'll still divvy up $65M in OT pay that IBM's shelling out to settle a federal class action suit."

Comments

Wow!

[Sampizcat]

Wow! A $27.5 settlement that gives $27000 to 800 workers? How do I get that guy to be my accountant?

Companies use salary to circumvent labor laws

[JPriest]

It is true, after sticking it out working a 75 hour week for 12 months salary in the US, I nearly refuse to even entertain the idea of taking a salary position. I would rather make minimum wage and be paid hourly than ever do that again.

Re:Companies use salary to circumvent labor laws

[udderly]

I agree. These stories sound like the movie Office Space. There is no way that I am going to get used like that.

I used to work for a Fortune 100 company and my boss worked a minimum of 90 hours per week. She came in at 5am and left at 7 or 8pm M-F. On Saturdays at least ten hours and a six-hour day on Sunday. When I figured her hourly rate, she was the lowest paid employee in the department.

I don't understand this whole unpaid overtime anyway. If these companies are so bought into capitalism, then they ought to buy more of your labor when they need more.

Re:Companies use salary to circumvent labor laws

[Venner]

>>I don't understand this whole unpaid overtime anyway. If these companies are so bought into capitalism, then they ought to buy more of your labor when they need more.

Exactly. I always wonder how we've gotten to this point. Henry Ford, who made positively vast amounts of profit at the time, did so not only through efficiency and affordable products (i.e., he sold below even what the market forced him to sell at), but also by *doubling* industry wages for his workers and creating the standard 8-hour-a-day, 5-day-a-week work-week. He wanted loyal, efficient workers, and that's sure one hell of a way to get them.

Re:Companies use salary to circumvent labor laws

[Anonymous Coward]

Why did you work 75 hours per week? Were you kept there at gunpoint?

Companies I've been with have tried shenanigans with me. I just didn't play along. I came at 9, I left at 5, and when the manager whined I ignored him. I didn't get fired because I did a good job, and had they tried they would have had an expensive lawsuit on their hands. I even had the president of the company call me one weekend, and I cut him off in mid-harangue telling him to get back to me on Monday.

Yet I survived three rounds of layoffs. Obviously they liked me.

I'm sorry, but if they scammed you into working 75 hours a week through mere words, you're a patsy.

Re:Companies use salary to circumvent labor laws

[udderly]

I always wonder how we've gotten to this point.

Greed and overweening pride. Greed on the part of employers; overweening pride on the part of employees who accept a title instead of what they are due (money).

So many people I know are in this position of being forced to work unpaid overtime and are constantly bitching about it. But I think that a lot of them get off on it because they think that it makes them feel like they have an important job. I actually think that it makes them unimportant--if their time was so valuable, you'd think that they would get paid for it.

Others act like they *have* to because they need their high salary (even though the hourly rate sucks) to afford their lifestyle. Then you look and see that their family of four lives in a five bedroom, 3.5 bath, 5000 square foot house. Often they say that they're "doing it for the kids," as if their kids wouldn't rather actually see their parents once in awhile instead of having stuff.

Ooops! Looks like I went off on a rant. Sorry.

Re:Companies use salary to circumvent labor laws

[Aceticon]

In IT (at least in software development) chronic overworking not only decreases efficiency, it actually makes projects be even later than working only normal working times.

In the software development process, there's a negative feedback loop that affects the productivity of those developing the software. It goes like this:
- Those that constantly work long hours get more tired
- Tired people do more errors (bugs in the code, bugs in the design, incorrectly documented requirements)
- Fixing the extra errors consumes a disproportionatly big ammount of time - the problem has to be found (sometimes only on production), then tracked down to the root cause and then fixed (which in the case of design/requirements errors can include re-writting huge sections of the code).

I my experience from working both 8h/day and 10/day, the total daily productivity (as measured by requirement features successfully implemented) of those working 10h/day is actually lower than those working 8h/day. In other words, it takes more time to develop and deliver and application that fits the client's requirements if developers work 10h/day than it would if they work 8h/day.

From what i've observed, a similar effect might also be in play in other intelectual professions:
- From what i've seen, overworked managers are less organized, tend to forget things more easilly and do not as easilly recognize important information than those managers that work more reasonable work hours. In practice this means that they will make wrong decisions, will not make decisions on time or will not pass on all the necessary information to those that execute their decisions which results in a lot of fires and a lot of time and work (by the manager and also by those under his/her management) spent putting down the fires.

From my experience working in several countries, both with and without chronic overworking i believe the fault lies with two factors, often in conjunction:
a) Bad managers. These are usually people that are not experienced enough to realize that the negative implications of overworking in intellectual occupations and thus keep demanding long working hours from those they manage (and often themselfs) under the wrong impression that more-hours-at-work = faster-results. Also, management errors often result in a lot of extra work on the development side (say, for example, because a "simple looking" new requirement from the customer was blindly accepted) which means that in practice everybody in the group is pressured into overworking to cover up the incompetence of the manager. One can often spot this kind of managers, even during a job interview, because they are more disorganized and relly heavilly on giving soft rewards (examples: the team's night out; "ultra-flexible" hours; extra relaxed clothing standards).
b) Consultancies doing fixed priced projects for external customers. They sell a project to do "something" for $x. Bad estimations, incorrect requirements, time lost waiting for things (examples: interface specifications from the client; hardware required for the project), time lost due to issues in the choosen technologies - all these things mean more time spent working in the project. If the extra time is payed then the profit goes down. Making people work more hours seems at first sight to be a way to "keep on target" without extra costs (as to why this isn't true, see explanation above).

Re:Companies use salary to circumvent labor laws

[Anonymous Coward]

(warning: wall of text, but please hear me out)

i'm the payroll coordinator for a medium sized company so i know a thing or two about overtime law and salary vs. non-salary.

truth be told, being "salaried" is not a relevant issue. the relevant issue at hand is classifying whether an employee is exempt or non-exempt status. so what do these two classifications mean you ask yourself. the basic theory for these two classifications depends on how employers derive productive (production being a generic term referring to making money for an employer) value from their employee.

in the case of non-exempt employees, employers derive value from an employee from the TIME the employee invests to increase production for the employer. for example, say that you work for a burger joint and it's the end of the week and you're about to clock out and go home because you're going to hit 40 hours. however, the manager asks you to stay 5 extra minutes to flip the 20 burgers on the grill before you go home. is the company better or worse off for having kept you for 5 extra minutes? the argument would be that the company was better off as you aided the efficiencies of production by ensuring that the burgers were properly cooked and ensured that there were no customer complaints.

in the case of exempt employees, employers derive value from the SERVICES that an employee provides. these services have NO PERCEIVED time value and employees can expect to receive the same amount of pay whether they work 20 hours or 40 hours in a week. for example, let's say a you're a doctor at a hospital and the hospital pays you $7500 every time you perform a tonsilectomy (i don't know how much a doctor would charge for a tonsilectomy so the number is arbitrary). it normally takes you 1 to 1.5 hours to perform a tonsilectomy. now, let's say you ended up with a particularly difficult tonsilectomy and it took you 5 hours to do it. the hospital does not have to pay more than $7500 because it took you longer to do a tonsilectomy. it's a service that you provide with an amount that has already been agreed upon.

if you want it simple and easy, exempt employees get overtime and non-exempt employees don't.

so what does being "salaried" have to do with exempt vs. non-exempt status? absolutely nothing. an employee can be classified as non-exempt status and still be paid a salary as long the employer pays the employee for any work past 40 hours so time would still have to be kept for the employee. however, an employer CANNOT EVER, in any way, shape, or form, pay an exempt employee hourly.

now, in the u.s., there are hundreds of thousands of pages worth of laws and court orders in local, state, and federal governments that protect non-exempt employees from abuse by employers (and much less protecting exempt employees). among those hundreds of thousands of pages are rules that differentiate exempt employees and non-exempt employees. one thing a government agency does when it comes in to audit an company's employee status is that it ONLY EVER audits employees that are classified as exempt. if an agency comes into audit a company that classified ALL of its employees as non-exempt, they'll wish a nice day and walk right out. the reason being, and i'm sure it's already obvious given what the topic is about, is there is a hell of a lot more potential for abusing employees classified as exempt than employees classified as non-exempt.

so the best way to derive how an employee needs to be determine an employee's status is the job description of the title you are working under. this is actually a legally binding document. you guys probably got it when you got your job, glossed over it, and put it away where it's out of the way but in the grand scheme of things, this is your evidence of proving whether or not you should be paid overtime. in fact, when a government agency comes into to audit a company's employees, they'll ask for 2 things: a list of all employees with status and job title and all job descripti

Re:Companies use salary to circumvent labor laws

[blackchiney]

I think before you use that in a court you might want to check that line with a lawyer first. In a proper court of law. You'll have to convince a judge the hours required were within reason. Like working 90 hours a week for one week of the entire year due to an extraordinary circumstance. That's where IBM and Siebel got hammered. Their extraordinary circumstance became normal business practice. Putting the customer first only looks during interviews and employee orientation. If you can't manage to keep a project on time with a reasonable (40hrs/wk/employee) timeline than you might have to rethink who is doing the manageùent.

Re:I used to be an IBM Software Engineer

[udderly]

Anyone salaried worker making 80 grand who works 80-hours every week should find a job more to his liking or start a union, not complain about unpaid overtime.

No kidding. That's less than $20/hour. You wouldn't need to go to college to make that. Both of my high school education brothers-in-law make way more than that and are home in time for supper.

Re:IBM overtime

[Anonymous Coward]

It really has nothing to do with who took over Congress as to why this was settled. This is common practice by companies large and small that they classify non-exempt workers as exempt and screw the employee out of overtime. The typical employee moans about it but never bothers to do anything about it. It is a simple as placing a phonecall (well, not quite that simple) to the Labor Relations Board http://www.nlrb.gov/ . Most employees I suspect are non-exempt. I have done this several times with positive outcomes for myself and co-workers. Typically, If you mention the thought of calling the NLRB to someone in HR/accounting the problem will mysteriously go away.