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IBM Responds to Overtime Lawsuits With 15% Salary Cut
bcmbyte writes "IBM in recent months has been hit with lawsuits filed on behalf of thousands of U.S. employees who claim the company illegally classified them as exempt from federal and state overtime statutes in order to avoid paying them extra whenever they worked more than 40 hours per week.
The good news for those workers is that IBM now plans to grant them so-called "non-exempt" status so they can collect overtime pay. The bad news: IBM will cut their base salaries by 15% to make up the difference."
Maybe I am confused, now that they are classified non-excempt, does that mean the OT pay is retroactive? If so, grab money, cue job search...
This is the last straw....
This, folks, is a good example of why labor unions are still around. Not that it's going to help any in this case...
I wonder how many times this will work, before large companies adjust their payrolls. Radioshack settled a similar lawsuit with their store managers several years ago, and lowered their base salaries to offset the new overtime payouts. I'd think they'd want to act preemptively, to avoid a lawsuit--I'm somewhat surprised IBM had succumbed to this practice.
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I used to work for a Accenture, a rival firm. While we officially got paid overtime, booking it could get you into a lot of trouble. Bosses would say, not in writing, to not book OT. Try confirming that by email and you get stern warnings to not be a smart-ass. One guy I knew booked OT anyway. Legally, they couldnt say no. Next thing he knew, he was staffed in St. Louis! Ouch. So the people *suing* IBM? Expect pain much worse than salary cuts. They will probably be executing 100,000 line test scripts soon.
And how exactly do you live if you don't work? Property is owned by the government so you must always pay taxes or you loose "your" land. Food, power, transportation? Yes, why don't you show us all how you can live without working aside from taking up residence in a shopping cart on the corner. Also, don't the employees who do the work deserve some of the benefit? It seems corporate executives want to make multi-million dollar bonuses based on the work of others without sharing. Work hard so the boss can buy his 16 year old daughter a $65,000 car! Look at the striking writers guild in Hollywood. Are they wrong for wanting a piece of what they create or should they allow the executives who do nothing to take all the money for themselves? How about all these mergers? Can anyone compete against a mega-corp that owns politicians and writes the laws themselves? If you think the market is "free" then you are living in another world.
When I used to work for IBM (10 - 8 years ago), it was standard U.S. practice: each year, your manager calls you into a meeting and tells you what your new pay level is. You can accept it, or quit your job, or treat it like the beginning of a negotiation, which will in most cases get you labeled as a difficult employee.
It's pretty laissez faire, except that they can't base your pay level / pay level changes on race, religion, etc.
I wouldn't be surprised to see a (relative) handful of people quit over this, but I'd bet good money the majority will stay put - despite the 'insult' the paycut hands out. The reason - take a good look at the US economy. There isn't a lot of upward mobility it the numbers, economists are worried about a recession - and that fear usually turns into a self-fulfilling prophecy; at least to a point. Things aren't looking so good right now, people are worried. The Housing sector is the number one place not to be stuck working right now, tech isn't far behind.
The bad thing about being a contractor is I only get paid for the time I work (no sick leave, public holidays, annual leave etc)
The worst day working for yourself is better than the best day I've ever had as an employee...ever. There is a lot of detail work necessary: Invoicing, collecting on the invoices, insurance, license fees, expense tracking, quarterly taxes. And there are liability issues to consider. But as more and more employers keep pushing responsibility and accounting issues down to the lower ranks, the amount of paperwork really isn't that different. Many employers expect you to process all that paperwork on your own time and travel on your own time. Plus a lot of them are getting dickishly intrusive monitoring and spying on their employees.
Besides, cubicles suck ass.
IBM gets caught breaking the rules and responds by cutting salaries. Nice. Just keep pulling stunts like that and your turn over will remain painfully high.
Strangely enough, once I was working on a strictly per-hour basis, the boss found far fewer 'emergencies' that required me to work all weekend.
Funny how that works, isn't it? Want me to work all weekend? No problemo! Just sign this invoice...right there...here's a pen.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
No, this is great business and I love it. I am considered an exempt employee, so I am salaried with no OT; however, I love seeing corporations telling their employees to fuck off when they pull shit like this. IBM said, "You want to be hourly, fine here is your old pay minus 15%." Now, do not cry too much for these people. Assume their old salary was equivalent to a rate of $x per hour. Their new rate would be about $(x * .85).
Previously, their annual salary would've been approximately 2000*x. It is now about 1700*x. Assume overtime is time and a half, they would get paid 1.275*x for each hour of OT. This means they would need to work about 236 hours of OT a year, or about 4.5 hours per week. If they were working so much OT that they were willing to sue, then this should be easy to make up and in the end they are making more money, since they weren't getting paid OT before.
Their only other option would've been to unionize; however, if these are programming and/or engineering jobs, you can bet IBM would've outsourced them in a second to save the money and the hassle of dealing with a workers union. Also, don't think there aren't plenty of engineers in the US who are willing to "scab". Most the engineers I know (myself included) absolutely abhor unions.
The problem I've always had is that few employers seem to really grasp the concept of a salaried position. In a salaried position, I'm hired to get a job done, irrespective of how many hours it takes. If it takes me 40 hours a week, great. 50 hours a week, oh well. 30 hours a week? PARTY! But most employers don't get this. So they look on salaried as a minimum of 40 hours week. In my particular specialty (troubleshooting really big systems), that's just silly, because often there's nothing to do... so when I was really doing my specialty, I would often end up doing nothing, sitting at my computer just to keep the IM icon lit up, when I could have been resting up for the next 48 hour marathon problem. It's just annoying ... I mean, if I'm salaried, why do a timesheet? Yet they all want a timesheet. If they want me to work free overtime, then they need to g
"He who would learn astronomy, and other recondite arts, let him go elsewhere. " -- John Calvin, commenting on Genesis 1
Wrong. Harm done. Sure, you keep working overtime and your take-home remains about the same. Except when you take a vacation or go on maternity or other medical leave, and suddenly your income drops 15% for the duration. Also, the company's annual pension payout to you drops 15% because that amount is based on your base salary, not overtime.