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IBM Responds to Overtime Lawsuits With 15% Salary Cut

samzenpus posted more than 6 years ago | from the give-with-one-hand-and-take-with-the-other dept.

IBM 620

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."

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sounds about fair (-1, Troll)

Anonymous Coward | more than 6 years ago | (#22165532)

No harm done -- the employees just have to keep doing regular overtime and they get the same salary they used to. If they do less, they get less money and if the boss deamnds more, they get more pay. Sounds fair to me.

Re:sounds about fair (4, Interesting)

ArsenneLupin (766289) | more than 6 years ago | (#22165640)

No harm done -- the employees just have to keep doing regular overtime and they get the same salary they used to. If they do less, they get less money and if the boss deamnds more, they get more pay.
... and if they show up for their normal time, but spend all day on Slashdot or on personal projects, they still get their regular pay...

Sounds fair to me.
indeed...

Hmm (5, Informative)

Tesen (858022) | more than 6 years ago | (#22165540)

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...

Re:Hmm (5, Informative)

nesabishii (834123) | more than 6 years ago | (#22165630)

Typically the settlement includes retroactive overtime pay for a limited amount of time, maybe a year or possibly even more. The new pay scheme is probably exactly equivalent to the old, but substitutes overtime hours for base pay, meaning wages stay the same. However, this doesn't account for the possibility that now, if their hours are reduced to below overtime, they are compensated much more poorly. It's a short term monetary gain (in the form of a settlement), for a net loss in wage security (as fewer hours now means lower wages, compared to under the "exempt" pay plans). So, jumping ship could be a smart move here, or at least an easier one with the settlement.

Re:Hmm (3, Insightful)

that this is not und (1026860) | more than 6 years ago | (#22165646)

It also doesn't account for the possibility that the staff who work overtime will now be paid more than the clockwatchers who participate in the stampede to the parking lot at 4:30.

Re:Hmm (4, Insightful)

Mr. Underbridge (666784) | more than 6 years ago | (#22165872)

It's a short term monetary gain (in the form of a settlement), for a net loss in wage security

Depending on the job, wage security is often less of a concern than schedule security, ie the possibility that the boss will tell you you're working 80 hours next week. Now he has to account for extra overtime over the usual in his budget, and that's a heck of a deterrent.

Each may very well be more important to different people. As another respondent said, this probably is best for the quality employees who always find themselves overcommitted and working hard, and maybe less good for clockwatchers.

Re:Hmm (1)

Hognoxious (631665) | more than 6 years ago | (#22165996)

If so, grab money, cue job search...
These are IBM employees. I doubt they're smart enough to think of that.

Stapler (5, Funny)

gmyerxa (1226166) | more than 6 years ago | (#22165544)

This is the last straw....

Re:Stapler (5, Funny)

Kamokazi (1080091) | more than 6 years ago | (#22165838)

Woah woah woah. It's not last straw until you a) stop getting a paycheck, b) get moved down to storage B, and c) find a hundred grand laying on the floor.

Re:Stapler (1)

NekSnappa (803141) | more than 6 years ago | (#22165980)

Actually C. Should be $305,326.13

Free market (0, Troll)

mi (197448) | more than 6 years ago | (#22165548)

Nobody forces anyone to work. No one is entitled to any particular salary.

Re:Free market (5, Insightful)

Anonymous Coward | more than 6 years ago | (#22165654)

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.

Re:Free market (2, Informative)

eugene ts wong (231154) | more than 6 years ago | (#22165762)

I live in Canada, and I have a friend who works for our tax collectors. He says that Canada won't take your land. You won't be able to sell it, and they can make life miserable for you in other ways, but you can keep on living under your roof and on your property.

That seems fair to me, by today's standards.

Re:Free market (-1, Offtopic)

mi (197448) | more than 6 years ago | (#22165904)

And how exactly do you live if you don't work?

That's up to you entirely.

Property is owned by the government so you must always pay taxes or you loose "your" land.

Off-topic.

Re:Free market (2, Informative)

TheRaven64 (641858) | more than 6 years ago | (#22166018)

And how exactly do you live if you don't work?
I don't know about where you live, but in the UK you can claim unemployment benefit (possibly known as jobseekers' allowance) while unemployed. You may also be exempt from council tax (property tax) and you don't pay income tax on your first £5000/year of income (then only 10% for the next few K). You can live without working, you just don't enjoy a particularly high standard of living.

Re:Free market (1)

the grace of R'hllor (530051) | more than 6 years ago | (#22165658)

If you want to keep your employees, or keep them motivated, showing them a modicum of respect and some common goddamn decency goes a long way, though.

Re:Free market (0)

Anonymous Coward | more than 6 years ago | (#22165822)

Why keep them? You can always get more.

Re:Free market (2, Insightful)

mi (197448) | more than 6 years ago | (#22165968)

If you want to keep your employees, or keep them motivated, showing them a modicum of respect and some common goddamn decency goes a long way, though.

Agreed immediately. However, the story moved from the realm of "normal" relationship, when the employees tried to force IBM via lawsuits. That "meant war" and moved things into the legal realms. Now IBM is simply looking for legal ways to continue paying these people, what they have always been paid.

If that is making a mockery of the law, well, the laws, which attempt to regulate relationship between private parties, are largely idiotic to begin with...

Typical. (5, Insightful)

beavis88 (25983) | more than 6 years ago | (#22165552)

This, folks, is a good example of why labor unions are still around. Not that it's going to help any in this case...

Re:Typical. (-1, Troll)

Anonymous Coward | more than 6 years ago | (#22165674)

So you'd rather have employees hold a company hostage and bleed it of all it's money until the company goes out of business? If your are on salary, you aren't ENTITLED to overtime.

This isn't China, Comrade. If you don't like your job, you are free to quit and find another without being shot in the head.

Re:Typical. (5, Funny)

beavis88 (25983) | more than 6 years ago | (#22165710)

What are you, a fucking Presidential candidate? That's not remotely close what I said.

Re:Typical. (1)

EastCoastSurfer (310758) | more than 6 years ago | (#22165712)

Why? Did these employees original contract say they would get salary + OT pay?

Re:Typical. (1)

gEvil (beta) (945888) | more than 6 years ago | (#22165910)

Why? Did these employees original contract say they would get salary + OT pay?

No, the contracts most likely explicitly said they were exempt and thus not eligible for overtime pay. But we can't expect people to actually read the contracts they sign...

Some reference materials (3, Interesting)

Eggplant62 (120514) | more than 6 years ago | (#22165936)

http://www.dol.gov/esa/regs/compliance/whd/whdfs23.pdf [slashdot.org] >U.S. Department of Labor Fact Sheet #23: Overtime Pay Requirements of the FLSA

29 CFR Part 541, Defining and delimiting the exemptions for executive, administrative, professional, outside sales and computer employees, final rule [dol.gov]

IBM may very well have been legally justified to not reimburse these folks the overtime pay in the first place. However, since it was found otherwise, I think the 15% pay cut to compensate is just spitting in the face of their employees. How many good engineers and other employees will they lose as a result of this move? It seems to me that if you have good people working for you, willing to stay after hours to keep things moving, you should reward them for the extra effort. Too bad if it happens that computer employees rack up lots of overtime, but it's the nature of the business and should be considered cost of doing business.

Re:Typical. (2, Insightful)

Anonymous Coward | more than 6 years ago | (#22165798)

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 work for a Union. They happily negotiated less than 3% for cost of living increase for the last contract. Unfortunately that was nearly erased by them raising the union dues 2.5%.

In addition, we don't get "paid" for overtime. We get comp-time instead. Because you're only allowed to use comp-time when your manager says that it's acceptable to do so, that means that you get fucked every single time.

Unions exist only to protect the institution of unions, not the employees. Fuck em.

Re:Typical. (1)

AdrocK (107367) | more than 6 years ago | (#22165888)

Unions exist only to protect the institution of unions, not the employees. Fuck em.

Cheers.

When I was hired, I was offered the option to join the union. I said "No, Thanks", but soon changed my mind. The "representation fee" for not joining the union is higher than the union dues.

My point of view is that my union mainly keeps the lazy and unqualified employed.

Re:Typical. (3, Funny)

Anonymous Coward | more than 6 years ago | (#22165926)

I'm in my own private union. I'm the only union member. On the downside, dues are 100% of net takehome pay. On the upside, most of that gets spent on beer for "union meetings".

Re:Typical. (4, Insightful)

mattwarden (699984) | more than 6 years ago | (#22165846)

How can you make the assessment that IBM is in the wrong by introducing the 15% reduction without knowing the salary range in question?

Re:Typical. (1)

yorugua (697900) | more than 6 years ago | (#22165906)

How can you make the assessment that IBM is in the wrong by introducing the 15% reduction without knowing the salary range in question?
Because IBM's Union is against it? :) check www.allianceibm.org , http://www.petitiononline.com/ibm1701/petition.html [petitiononline.com]

Re:Typical. (4, Interesting)

stewbacca (1033764) | more than 6 years ago | (#22165932)

Well, to be fair, the labor unions are the reason we have people who demand to be paid 1.5x their pay if they work a minute over 8 hours per day or 40 hours per week, or don't get their two smoke breaks per 4 hours.

I've been "exempt" for the past 10 years, and wouldn't trade it for hourly wages + overtime for anything. The fact I'm "exempt" pretty much assures that I have a strong salary and needn't worry about those extra 5 overtime hours per pay period to make rent. I realize that sounds snobbish, but TFA gives examples of jobs in the 80k per year range...hardly the types of jobs that worry about making the rent payments.

A better solution than the labor unions would be for these 80k/year salaried folks to take their skills elsewhere, like to a company that values their contributions. I've never understood how a union supporter could go back to work for the same pricks they were fighting with in the first place.

They need a Union (3, Informative)

Crazy Taco (1083423) | more than 6 years ago | (#22165994)

Let me start by saying that I am a very strong Republican conservative, and I normally hate labor unions, especially since most of them don't do much but collect money from workers and use it to buy politicians. That said, in this instance I absolutely think those workers should immediately unionize and walk off the job. IT workers are already treated as slaves just about everywhere, and it's about time they got paid for their overtime AND STILL recieved a salary commensurate with the difficulty of their jobs and the level of their education.

Furthermore, this move by IBM is complete garbage. Google spends a heck of a lot more money on its employees than this, and it doesn't have any trouble with the "competitive pressures" cited by IBM. The reason it doesn't have any trouble is twofold:

  1. By treating its employees fairly, it attracts much of the best IT talent around, and this talent in turn is very productive. Their employees probably produce more per hour than the employees most anywhere else through raw skill alone.
  2. The really big reason Google doesn't have these competitive pressures forcing them to pay their workers nothing is because Google has good management and actually produces worthwhile, marketable products. When is the last time IBM produced something good that people wanted to buy? PCs? Gone... IBM completely lost out in that market. Operating Systems? OS/2 is dead. Lotus Notes/other office software? Horribly ugly, clunky, and not even close to as good as Microsoft products. IDEs? They have some, but they are horribly overpriced things like Rational Apex (an ADA IDE) that cost 30,000 dollars a license and are vastly inferior to Microsoft's Visual Studio. And while IBM helped birth Eclipse and still funds it to some degree, that is an OSS IDE, and a lot of it (plus a lot of the add-ons) were built by volunteers.
    Honestly, the only things they seem to produce anymore are a few supercomputers (and the market for those is clearly limited), some mainframes (again, limited and shrinking market), and some stupid "software development processes" like the Rational Unified Process (RUP). (News Flash for IBM: a process isn't a product. I can go out and make my own process that suits my work (which is what most people do), or use one of many free and well known process like Agile or UP). IBM also produces a lot of marketing speak and vague references to "services" that they can offer to companies (not sure what those actually are or why I would want them), they produce a lot of commercials about servers spiraling out of control, and they spend a lot of time on clearly stupid strategies like building a corporate office in Second Life and having a director of Internet and Virtual Worlds.
    With all that sort of vaporware and garbage products, it's no wonder that they are facing big competitive price pressures. They deserve the problems they are having. But the regular employees shouldn't be the ones penalized. The problems (and pay cuts) should be directly placed in the laps of their management, especially their top executives. IBM has repeatedly had the chance to conquer the world, and they blow it on stupid ideas every time.

Again. (5, Informative)

nesabishii (834123) | more than 6 years ago | (#22165558)

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.

Re:Again. (5, Insightful)

kripkenstein (913150) | more than 6 years ago | (#22165768)

Radioshack settled a similar lawsuit with their store managers several years ago, and lowered their base salaries to offset the new overtime payouts.
I've heard about lots of this sort of thing going on in smaller corporations, that you wouldn't hear about in the news. Fact is, the 'industry norm' is in many cases to not pay overtime for these sorts of jobs, even though people constantly work beyond the normal hours (these aren't 9 to 5 jobs!). As compensation, the base salaries are typically quite high. But it turns out that this norm is somewhat at odds with certain laws regarding overtime, and employees in many cases demand what they think they deserve.

The end result is exactly what IBM did. Suddenly starting to pay for overtime means IBM is raising effective salaries by 10-20% or more, so naturally IBM lowers base salaries. The end result is that we are exactly where we started - people work the same hours, and get the same pay.

Well, at least on average; for individuals who work more or who work less, there will be some change. There are also motivational issues - if you are paid for overtime, you have less incentive to work efficiently (one reason why hi-tech managers, and many workers, don't like paid overtime and prefer to raise the base pay). Overall, it is hard to say that the change is for the better. The old salaries and norms were already 'working' - they were comparable to industry norms, were arrived at after years of haggling, corrections, and so forth, and most importantly people knew what they were getting when they signed on.

Free Market (2, Insightful)

jockeys (753885) | more than 6 years ago | (#22165560)

if the free market responds correctly, i would expect ibm to lose quite a few employees over this. i know if i was working there i'd be shopping my resume around after a slap in the face like this.

Re:Free Market (0, Flamebait)

mi (197448) | more than 6 years ago | (#22165602)

if the free market responds correctly

Free market can do no wrong — by definition. What may happen is some hyperventilating politician pushing a law outlawing IBM's move on some pretext or another — and making the market less free...

i know if i was working there i'd be shopping my resume around after a slap in the face like this.

Maybe, the job is still very good — interesting and otherwise rewarding, khm?.. This does sound like a slap in the face, but the first slap was by the employees — suing your employer (or anyone) "means war".

But yes, the market will sort it out...

Re:Free Market (4, Interesting)

plague3106 (71849) | more than 6 years ago | (#22165850)

The free market only works if everyone is on a level playing field. The employees of IBM and IBM itself are far from being on a level playing field.

This does sound like a slap in the face, but the first slap was by the employees -- suing your employer (or anyone) "means war".

No, the first slap was IBM breaking the law by classifying employees as exempt when they were not. The employees are totally in the right here, and IBM 100% on the wrong side.

Companies like to claim exempt vs. non-exempt is a "gray area." Its only gray when you're trying to screw your employees out of overtime pay.

My personal belief is that salary pay should be made illegal except for strickly management positions. That would solve this problem nicely.

Re:Free Market (1)

Knuckles (8964) | more than 6 years ago | (#22165876)

Free market can do no wrong -- by definition.

that's only true if you are a free market. If you are a human being affected by markets, free or otherwise, then yes, it can do wrong.

Re:Free Market (0)

Anonymous Coward | more than 6 years ago | (#22165648)

You know the U.S. is falling into a recession right? If the free market responds correctly, those people who quit will quickly be replaced by a TON of job seekers out there who will hire in at a much lower pay. This assumes that those IBM resume-shoppers can even find a similar job within 6-12 months.

Re:Free Market (1)

that this is not und (1026860) | more than 6 years ago | (#22165672)

If I was a clockwatcher just putting in time at the job, I think I'd be shopping around my resume, too. There's nothing worse than a company actually paying attention to the number of hours an employee works and paying them accordingly. Except, maybe not.

Re:Free Market (5, Insightful)

navygeek (1044768) | more than 6 years ago | (#22165694)

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.

Re:Free Market (4, Informative)

rherbert (565206) | more than 6 years ago | (#22165956)

Exempt employees get paid more because it's anticipated that they will work some uncompensated overtime. If you change from exempt to non-exempt, then your pay SHOULD be cut. You can't get the best of both worlds - unless you're a contractor. This is especially important for government contracts - you negotiate rates for certain job categories, and you're stuck with them. Your profit is limited by law, so you can't just absorb a 15% hit like this. So you've got to cut the salaries.

Re:Free Market (1)

eugene ts wong (231154) | more than 6 years ago | (#22165976)

I disagree, because the free market needs to be protected. Not paying for overtime is abuse. The government should conduct surprise inspections to see who is working overtime, and figure out how much are getting paid and whether or not they are being paid.

I think that the reason companies get away with this is because people have to file lawsuits or go through difficult tasks to make a significant difference. If the government found out that the company wasn't paying taxes, then do you think that that they are going to wait till the employees sue their masters in court, before politely asking for the taxes?

Another idea is to make over time painful, so that even at minimum wage levels, their is no incentive to keep servants and slaves working overtime. For starters, the companies should be paying overtime by the second; none of this, "Oh, if you work for us 7 minutes overtime, then we don't pay you.". After all, they don't appreciate us being 7 minutes late. Secondly, they should be paying a rate of something like 2 times the normal wage for the first hour, and then 4 times the wage for the second hour, and just keep on doubling. After 1 hour of extra work, the company should buy a full healthy meal for the worker and his family, on top of his wages and overtime pay. After all, they took his family time away, so they should save him time at home. After the second hour, they should provide a taxi cab home, or some equivalent. After a third hour, then they should provide a house cleaner for 3 full hours of work. The painful list just keeps adding up. The clock never stops until the food is in his hands, and he is able to leave freely.

Re:Free Market (1)

SharpFang (651121) | more than 6 years ago | (#22166000)

And good riddance, the company doesn't need disloyal employes ready to sue their own employer.

(no, the above is not -my- opinion. It's just how the corporation will see it.)

Lawsuit? Prepare for Other Pain... (5, Interesting)

Anonymous Coward | more than 6 years ago | (#22165562)

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.

Re:Lawsuit? Prepare for Other Pain... (1)

alohatiger (313873) | more than 6 years ago | (#22165786)

I worked for Andersen Consulting, and the OT depended on the project. Sometimes they'd send you out of town (with weekend flybacks) for the express purpose of separating you from distractions at home. So you could bill the most hours, get the most overtime, and (most importantly) bill the client as much as possible.

If the contract supported it, paying your hourly wage (a 2 digit dollar amount) was no problem when your billing rate was $200 or more.

Sounds about right, actually (4, Interesting)

Fortunato_NC (736786) | more than 6 years ago | (#22165564)

When I started working, I heard from multiple sources that our company budgeted for exempt employees by treating them as hourly employees who worked 5 hours of overtime per week. Given that most overtime is paid at time and a half, that's the equivalent of being paid for 47.5 hours at at a straight hourly wage. 7.5/47.5 = .1579, or about 15.8% of salary. Now the real question is, how many of these folks will get 5 or more hours of overtime per week?

Re:Sounds about right, actually (4, Interesting)

xplenumx (703804) | more than 6 years ago | (#22165886)

Now the real question is, how many of these folks will get 5 or more hours of overtime per week?

In my experience, the biggest drawback to being an hourly employee is that the company tells you when you can't work. If you're really enjoying a project or on a roll, it's extremely frustrating to be told that you have to stop for the day/week. You can't just not record any extra hours worked either as it's a liability for the company.

Re:Sounds about right, actually (1)

HistoricPrizm (1044808) | more than 6 years ago | (#22165898)

Actually, the real question is, how many of these folks knew what how many hours they were going to be expected to work when they started? If they had a reasonable expectation of the hours they were going to put in, then I have no pity for these people. If IBM misrepresented how many hours per week they were expected to work, then they were employed without fully understanding their conditions of employment and this is a reasonable response, from both parties. Now, if we watch how many people leave vs. stay, we might have a clue as to which of these scenarios is accurate.

the oath (-1, Troll)

Anonymous Coward | more than 6 years ago | (#22165574)


"By the symbols of the creator
I swear henceforth to be
A faithful servant of his most
Puissant archangel
The Prince Lucifer
Whom the creator designated as his regent
And Lord of this World
I deny Jesus Christ...the deciever
And I abjure the Christian faith
Holding in contempt all of it's works

As a being now possessed of a human body
In this world I swear to give my full
Allegiance to it's lawfull master,
To worship him our
Lord Satan and no other
In the name of Satan, the ruler of Earth
Open wide the gates of Hell
And come forth from the abyss
By these names: Satan, Leviathan,
Belial, Lucifer
I will kiss the goat

I swear to give my mind
My body and soul unreservedly
To the furtherance of our
Lord Satan designs
Do what thou wilt shall be the
Whole of the law
As it was at the beginning
Is now and ever shall be
World without end Amen"

- The Oath, Mercyful Fate

MOD PARENT UP (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#22165858)

* Guitar solo *

regulated in contract or law? (1)

pereric (528017) | more than 6 years ago | (#22165596)

Jokes about IBM aside (they rightly are about IBM management): Don't they have their salary regulated in contract? Or is it accept-or-be-fired (article doesn't tell)? I am not really familiar with US labour market. Is this legal? In many countries, you can only be fired for misconduct or lack of availible work. (The discussion about race-to-the-bottom and trying or not take part in it will probably take place somewhere else in the threads ...)

Re:regulated in contract or law? (5, Informative)

DoofusOfDeath (636671) | more than 6 years ago | (#22165688)

Don't they have their salary regulated in contract? Or is it accept-or-be-fired (article doesn't tell)?


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.

Re:regulated in contract or law? (1)

Tesen (858022) | more than 6 years ago | (#22165732)


Sure they can, they just do not tell you that they are doing that and most places have in the employmeny contract that you are not allowed to discuss your earnings with another employee. The ownership is on the employee to prove they were discriminated against.

Re:regulated in contract or law? (0)

Anonymous Coward | more than 6 years ago | (#22165862)

...most places have in the employmeny contract that you are not allowed to discuss your earnings with another employee.
That's legal over there? That's fucked up.

Re:regulated in contract or law? (3, Interesting)

Remloc (1165839) | more than 6 years ago | (#22165720)

Don't they have their salary regulated in contract? Or is it accept-or-be-fired (article doesn't tell)? I am not really familiar with US labour market. Is this legal? In many countries, you can only be fired for misconduct or lack of availible work. (The discussion about race-to-the-bottom and trying or not take part in it will probably take place somewhere else in the threads ...)
I've rarely seen the salary of an IT or programmer level person (which these apparently are) in a contract. Larger companies will usually document your initial salary in an "offer letter," but where it goes, up or down, from there is completely up to them and you can like it or hit monster.com.
Hourly and manual labor types usually have a union behind them to stop this kind of idiocy, but for reasons beyond me, my white collar cohorts refuse to stand up for themselves and unionize, so continue to have to accept crap like this, or worse, have their jobs summarily shipped overseas.
And before someone puts a political bent on it, it was like this even when the Democrats were in power.
"In Soviet Amerika, programmers don't have unions, and without unions, the company own YOU!"

hmm... (0)

Anonymous Coward | more than 6 years ago | (#22165598)

no wonder IBM was able to successfully make the low bid on getting the ability to do the massive Digital TV coupon program...

It's stories like this... (4, Insightful)

The Famous Druid (89404) | more than 6 years ago | (#22165612)

That remind me why I stopped being an employee, and became a contractor.

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 good thing about being a contractor is I get paid for _every_ hour I work.

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.

Re:It's stories like this... (5, Insightful)

HangingChad (677530) | more than 6 years ago | (#22166008)

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.

Seriously (0, Insightful)

Anonymous Coward | more than 6 years ago | (#22165620)

An IT Specialist making $80K a year should be classified as an exempt employee. An admin making $35K, that's another story.

You work 35 hours one week, you get paid for 40 hours; you work 50 hours one week, you get paid for 40 hours. That's life.

Re:Seriously (1)

Cerberus7 (66071) | more than 6 years ago | (#22165666)

Sounds good in theory, but that's not what really happens to exempt employees: You never work less than 45, and you average something in the 50s. Ask to leave early, and you get yelled at.

As for me, I've proudly held onto my non-exempt status as long as I can. I might have to give it up to get the next promotion I'm looking for, but I'll be damned sure to make up for the extra hours while negotiating my new salary.

Re:Seriously (1, Insightful)

Ralph Spoilsport (673134) | more than 6 years ago | (#22165680)

That's life for the gutless slaves who refuse to stand up and organise and fight these fascist moterfuckers back.

Why computer workers haven't properly organised with a union is something I still don't understand. If you work for someone else: YOU'RE A SLAVE. So ORGANISE! If you employ others, you're a SLAVE OWNER so EXPECT ORGANISATION.

RS

Re:Seriously (-1, Troll)

Beyond_GoodandEvil (769135) | more than 6 years ago | (#22165718)

That's life for the gutless slaves who refuse to stand up and organise and fight these fascist moterfuckers back.
Why computer workers haven't properly organised with a union is something I still don't understand. If you work for someone else: YOU'RE A SLAVE. So ORGANISE! If you employ others, you're a SLAVE OWNER so EXPECT ORGANISATION.

Why would I trade one tyrant, my boss, for another, the union leadership? If I don't like my boss, I can work somewhere else, with a union I am a slave to the whims of the slobbering horde. That sounds like a good plan.

Re:Seriously (1)

Remloc (1165839) | more than 6 years ago | (#22165774)

Why would I trade one tyrant, my boss, for another, the union leadership? If I don't like my boss, I can work somewhere else, with a union I am a slave to the whims of the slobbering horde. That sounds like a good plan.
Except the one thing you fail to grasp is your employer has a financial incentive to screw you for every penny s/he can to further their bottom line. They get paid by the stockholders, who's incentive is to give you as little for as much as possible.
The union, by contrast, is paid by you to get as much for as little as possible.

Re:Seriously (1)

geminidomino (614729) | more than 6 years ago | (#22165884)

The union, by contrast, is paid by you to get as much for as little as possible.
For themselves, not the actual workers. See above about a pathetic 3% "cost of living raise" immediately followed by a 2.5% increase in "Union Dues."

Re:Seriously (1)

Cerberus7 (66071) | more than 6 years ago | (#22165966)

That's exactly why Unions, in their current form, have outlived their usefulness. The only way for a union to operate in the best interests of the employees is for the employees of each company to create their own union, run by themselves, with no dues. They should be working together for their own common good, not paying some group of schmucks who are only in it for themselves.

Re:Seriously (1)

Ralph Spoilsport (673134) | more than 6 years ago | (#22165814)

yeah - by that logic, why bother with democracy? Why elect your leadership when you can submit to the tyrrany of some arbitrary capitalist overlord who has every reason and incentive to fuck you over? So why bother with a democratic government? Why bother settling for a lesser evil, and go directly to pure unadulterated fascism? Unions can be more or less democratically organised. It's up to the membership.

RS

Re:Seriously (1)

nunyadambinness (1181813) | more than 6 years ago | (#22165946)

"yeah - by that logic..."

Um, no.

You're not very smart are you?

Penny wise and pound foolish (4, Insightful)

schwit1 (797399) | more than 6 years ago | (#22165626)

15%? That's cheap compared to the damage from the loss of morale and confidence in management.

Cha - right! (3, Insightful)

Foolicious (895952) | more than 6 years ago | (#22165766)

15%? That's cheap compared to the damage from the loss of morale and confidence in management.

Do you honestly think they (IBM) care? Seriously. The whole idea of (mostly big) companies caring about "engagement" and "morale" is a bunch of trash. Lip-service. Hypocrisy. Whatever you want to call it. Know this: they only care just enough to keep you around. You can argue that this is the way it should be or "free-market" or "just doing business" and you'd probably have a good argument, but please don't fool yourself or anyone else into thinking that companies preemptively care about the loss of morale. They don't. They always react, never plan ahead.

Wow. I really sound bitter! Can you tell what size company I work for?

Re:Penny wise and pound foolish (4, Insightful)

avandesande (143899) | more than 6 years ago | (#22165834)

We are entering a hard recession. By next year the employees morale will be high because they have a job.

Re:Penny wise and pound foolish (1)

Splab (574204) | more than 6 years ago | (#22165916)

Very insightful, hope people are aware of this, getting a loan right now could prove to be quite hard to pay back.

Salary + Commission + Overtime? (2, Interesting)

poptix_work (79063) | more than 6 years ago | (#22165636)

Every job I've ever worked was salary based, and I've always understood that going a bit over 40 hours (and still being paid my regular salary) is in exchange for those slow weeks where I might only work 20 hours, and still collect 40 hours worth of salary. It's a pretty fair trade-off since some weeks (as an IT person) I'm twiddling my thumbs doing nothing and other weeks I'll be pulling 12 hour work days.

The fact that they were collecting commission on top of their salary, and still trying to demand OT pay is simply greedy IMO. Sales has always been a "You'll make as much as you want to" position.

Re:Salary + Commission + Overtime? (3, Insightful)

ccguy (1116865) | more than 6 years ago | (#22165844)

Every job I've ever worked was salary based, and I've always understood that going a bit over 40 hours (and still being paid my regular salary) is in exchange for those slow weeks where I might only work 20 hours, and still collect 40 hours worth of salary.
On those slow weeks, are you expected to be at the office for 40 hours anyway, or they actually let you go home once you are done?

It's fine that for you the slow weeks compensate for the crunch ones, but if you are at your desk for at least 40 hours a week (working or not) then there's no compensation whatever, you are still giving away your free time.

I must say that I'm also willing to work more than 40 hours (any reasonable number of hours) when needed, but I'm actually getting my time back (in time, not in cash - which I actually prefer).

Re:Salary + Commission + Overtime? (1)

FlopEJoe (784551) | more than 6 years ago | (#22165852)

Hmmm... I searched TFA and don't see anything about them getting a commission. was that in some other article? Google News [google.com] comes up empty, too. Note: I'm not trying to be an ass... but I think most bets are off if they were getting a commission. Then they would already be getting compensated for working harder/longer.

Re:Salary + Commission + Overtime? (1)

stewbacca (1033764) | more than 6 years ago | (#22165860)

Excellent point. Not to mention, for us "exempt" employees, we still get paid our hourly-rate for hours worked over 40 (as long as it is 45 hours or more), just not at the overtime rate. Seems totally fair to me. Or, we can save them up as "comp hours" and earn longer vacations a year.

History Repeats Itself (1)

rodrigoandrade (713371) | more than 6 years ago | (#22165642)

Working for IBM is the dream/objective of 9 out of 10 IT/IS grads. Then they finally get a job (or at least an offer) there, find out it's shit, then move on.

I got a job offer there once, but the salary was a freaking joke. I talked to other peolpe and they've experiened the same. I've since removed my resume from their the job site.

You're all forgetting... (1)

Sneeje (1172707) | more than 6 years ago | (#22165644)

That the 15% cut comes with 1.5x regular pay for each hour worked over 40.

Where did they think... (3, Insightful)

Aladrin (926209) | more than 6 years ago | (#22165650)

Where did they think that money was going to come from? That IBM would suddenly have that much extra money to throw around?

Personally, if it were me, I'd be happy about the change. Less guaranteed money, but for quite a while I've wished I could work -less- than 40 hours a week, even if it meant a pay cut. SO much other stuff I want to experiment with and no time to do it. So to have that overtime on the books instead of just being expected...

I'd guess many of these people will find newhires in their departments and 40hr/wk jobs again, too.

There are some who only lose in this story, though... The 1/3 of the affected workers who were -not- working overtime and were not involved in this lawsuit. They get paycuts anyhow. I can imagine how nice the workplace will be for the next year... Assuming any of those 1/3 stay. I sure wouldn't in their shoes.

Re:Where did they think... (1)

yorugua (697900) | more than 6 years ago | (#22165746)

Well, funny as it is, usually if you contract IBM services, and you buy say 30 hs a week of a certain skill at a certain rate, they would have another rate if case you overshot that 30hs/week timeframe. Do you think they are going to lower services contract by 15, 10, or 5% now?

Re:Where did they think... (0)

Anonymous Coward | more than 6 years ago | (#22165954)

Where did they think that money was going to come from? That IBM would suddenly have that much extra money to throw around?
Well, considering that IBM had $10,000,000,000 profit last year, and they're talking about $12,000/year for each of 8,000 employees, I'd say: yes, IBM probably does have a piddly little $100M lying around.

Re:Where did they think... (1)

Nursie (632944) | more than 6 years ago | (#22166020)

Yeah, but you wouldn't believe how hard it is to squeeze it out of them! That's why they 10 billion a year, start ignoring a few little costs here and there and, in a company of 330K individuals, your profit starts to slim rapidly.

Et Tu IBM? (1)

AndGodSed (968378) | more than 6 years ago | (#22165656)

Wasn't there a suit a few years ago against EA? ...

Here it is... [news.com]

Seems they settled or something...

IBM's way of handling this just sucks for those employees...

Hum (2, Interesting)

_14k4 (5085) | more than 6 years ago | (#22165664)

I don't get it. If you are exempt and feel you are being worked too much, simply: don't. I'm exempt and I tell my management "I can't work on that right now" more often than I'd like to - I treat the exempt idea as if I'm simply "contracted" so to speak, for 40 hours a week. If I work more I work more, if I work less I work less.

Maybe the IBM folks (didn't rtfa much) aren't making par with their peers in other places. That would be an issue, I suspect.

But going to hourly is only going to get them "watched" more, and to boot, it got their pay cut. Why? Probably because management is the same at IBM as it is everywhere: Exempt people are paid more than nonexempt because they are "on call" 24/7, etc.

Which is the exact reason my management here tells us that when we *are* on call, we do not get differential pay, etc. It's "built into our salary."

Re:Hum (1)

Foolicious (895952) | more than 6 years ago | (#22165832)

I don't get it. If you are exempt and feel you are being worked too much, simply: don't. I'm exempt and I tell my management "I can't work on that right now"
A lot of this depends on the "management". I agree with you completely and I know people that would also agree with you completely; however, some of them have little choice, given the mentality of their management. Yes, yes - they could take the typical slashdot advice and "then go find a new job"; however, life isn't quite as simple as writing anonymous messages on the web-r-net. Maybe they will find new employment, but until they do, it really, really sucks. But that's life sometimes, I suppose.

Re:Hum (1)

rizzo420 (136707) | more than 6 years ago | (#22165990)

that's exactly correct. generally, people getting paid hourly have their timesheets scrutinized to make sure that they're not adding extra hours in there or working extra just to get some overtime. in fact, there might not be a whole lot of overtime and it may not be approved (generally working more than the standard work week for someone paid hourly must be approved by a supervisor).

i'd say what IBM did is pretty standard. they budgeted for a certain amount of pay, knowing their employees do work more than 40 hours a week at times. however, i'd be willing to bet that they work less overtime than would equate to the 15% pay cut. IBM had to do it for budgeting purposes, and i'd side with IBM on this one.

i was actually lucky. i was switched from salary to hourly because of the overtime laws and they kept my pay the same. i ended up actually making more money that year (just a year because then i got a promotion to an exempt position) than i did the previous year.

2 IMBers (1 grunt, 1 boss), 1 coffe cup (0)

Anonymous Coward | more than 6 years ago | (#22165678)

nuff said.

I don't understand (2, Informative)

chord.wav (599850) | more than 6 years ago | (#22165700)

Somebody please explain me why engaging in war with your own employees, specially on such delicate matters as payment, is going to affect the stocks of the company in a positive way.

Wouldn't they ensure employee happiness so they perform better so the company earns more and be more productive etc etc?

Re:I don't understand (3, Funny)

Ihlosi (895663) | more than 6 years ago | (#22165728)

Wouldn't they ensure employee happiness so they perform better so the company earns more and be more productive etc etc?



With an attitude like that, you'll never make it into management. Read more Dilbert cartoons.

Re:I don't understand (1)

EastCoastSurfer (310758) | more than 6 years ago | (#22165794)

Before the settlement it was an unknown. The stock market hates unknowns. Now that they've reached a settlement, it's over and people can move on.

Wasn't it the employees who started this war?

what about just saying n overtime? (1)

hesaigo999ca (786966) | more than 6 years ago | (#22165702)

Maybe I might be a little newbs to this way of thinking, being i usually am consulting, but
i always thought when the company doesnt want to pay for overtime, they just say "we wont pay overtime" and thats that, no? If they get more employees to cover the diff. of hours, they get what they want without breaking the employees back. Sucks for the employee, but I can make do with the pay I get, for the time I work, isnt that what I agreed upon to begin with.

Sue again (0)

Anonymous Coward | more than 6 years ago | (#22165780)

That can't be legal.....

It seems very "contempt-ish" to me. I'd bring it straight to the same judge who awarded them the overtime pay.

It happens. (1)

TheVelvetFlamebait (986083) | more than 6 years ago | (#22165806)

It's just the nature of the free market. You can demand to have more as much as you want, but if the company doesn't want to pay more, they won't.

They get unemployment if they quit (2, Interesting)

ktappe (747125) | more than 6 years ago | (#22165812)

In most states if your employer cuts your pay and you quit, you get unemployment. A cut in pay is considered breach of contract on the employer's part and your rejection of the new terms is tantamount to you being fired. Hopefully enough IBM employees know of or learn of this and walk out, causing IBM to pay out substantial unemployment compensation.

However, knowing IBM, this is what they planned--with the current economic downturn, they probably want to decrease their payroll anyway and in so doing bolster their stock price. Still, it's critical (IMHO) that employees who quit know they can file for benefits so they don't get double-shafted by IBM.

A company can reward for overtime ... (2, Interesting)

scharkalvin (72228) | more than 6 years ago | (#22165840)

I am an exempt employee and I do put in some overtime when required by a project schedule.
Even though the company doesn't have to pay us for our overtime they have "thanked" us
for our effort with some perks. Two years in a row they gave the software development team
a week's worth of "comp time" (extra vacation time) "under the table" as a reward for the extra time worked.
While this wasn't even close to a one-to-one payback for the overtime worked, it was the
thought that counted. Put it this way, if they HADN'T done SOMETHING, the next time a project
schedule was threatened fewer hours of overtime might have been available from the team.

i went through something like this (1)

fl!ptop (902193) | more than 6 years ago | (#22165878)

so far, no one has mentioned the words "profit sharing." usually, a salaried employee who doesn't earn overtime gets a nice xmas bonus or something when the company's roi is over a certain amount. it's like saying, "we're glad you worked all those extra hours without getting paid, it helped the company have a good year, here's some extra bonus money for your efforts."

the company i used to work for routinely chastised me for not working one minute over 40 hours, saying nonsense like, "this other programmer regularly works 60-70 hours, why don't you?" to which i would always respond, "am i being paid to work 20-30 extra hours per week? no? well, that other employee must be terribly inefficient because i'm able to get all my work done in 40 hours."

what will they do? fire me? no, probably not, because then they'd have to pay me unemployment compensation, which probably costs them more because i'm not working at all, yet they're still giving me money.

the employees aren't the only ones with something to lose.

It's called a salary (1)

r_jensen11 (598210) | more than 6 years ago | (#22165914)

Salaries, unlike hourlies, are a flat amount, regardless of how much you work. If the company wants to keep you around and has you working more than you were told when you were hired (you did ask how many hours a week you would be working, right?,) then the company will typically give you a bonus to represent the earnings you helped contribute to during your additional hours.

End result (1)

WibbleOnMars (1129233) | more than 6 years ago | (#22165962)

Notwithstanding the fact that IBM is ultimately responsible for these pay-cuts, the net effect of this is that one group of employees (those currently doing loads of overtime and not getting paid for it) have won an argument with their employer, but gained nothing from it (they'll end up earning about the same as they were), but at the same time have adversely affected another bunch of employees (those who weren't doing any overtime, and will thus be earning substantially less than before). I'm playing devil's advocate to a certain extent here, but the fact remains that if you sue your employer, you shouldn't expect to come out with a good relationship with them. Even if you win the argument, you're likely to lose in the long run (or in this case, almost immediately).

Dilbert (1)

K. S. Kyosuke (729550) | more than 6 years ago | (#22166026)

I vaguely recall that something similar happened in a Dilbert strip. The punch line was somewhere along the lines of "So basically, you managed to negotiate to get only half the money for the same working hours" :-) But I would prefer such things staying on the paper. :|
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