Overtime bill pits needs of high-tech employers vs. workers

McClatchy NewspapersFebruary 6, 2012 

WASHINGTON — High-tech workers across the country could see smaller paychecks under an industry-led campaign to revise labor laws to further limit overtime benefits.

Some of the multinational firms that are behind the effort, such as IBM and Intel, say the changes are necessary to keep jobs from going overseas, where workers in technology are paid a fraction of U.S. wages.

Computer workers, however, see it as an effort to squeeze more work out of employees for less pay in an industry that's notorious for killer hours and all-nighters.

U.S. Sen. Kay Hagan, a Democrat from North Carolina, introduced the bill last fall to expand the kinds of technology workers who aren't automatically entitled to overtime. Her measure widens the pool to those whose duties include securing, configuring, integrating and debugging computer systems, she said.

Jim Kerick, a client support engineer at NetApp in Research Triangle Park in North Carolina, has a salaried position and doesn't put in a lot of extra hours, but he's still worried about the revision. He said he'd been laid off three times because of industry ups and downs, and he knows that no one who's making a living in computers and technology can count on staying in the same job forever.

When he started working in the industry in the 1990s, he worked as much as 90 hours a week. He used the overtime he earned to make the down payment on his home. He's not eager to work such long hours regularly again without being compensated for it.

"I'm not an indentured servant," he said. "I'm allowed to have a life."

The potential impact is significant. More than 3 million people work in computer-related occupations, including 408,000 in California, 250,000 in Texas, 140,000 in Florida, 105,000 in Washington state and 68,000 in Missouri, according to the Bureau of Labor Statistics. Employees and employers now disagree about how many of these workers are entitled to overtime.

It's unclear how many people would be affected. But many already aren't entitled to automatic overtime pay, which is defined as time and a half after 40 hours of work in a workweek. Employers can pay for overtime if they choose even if federal law doesn't require it.

U.S. labor law says computer employees who are paid fixed salaries of at least $455 a week ($23,600 per year) or who get hourly wages of at least $27.63 and who perform job duties such as systems analysis and programming aren't entitled to automatic overtime pay.

Employers seek the changes as class-action lawsuits by employees seeking back pay for overtime and missed breaks have risen dramatically over the last decade.

In November, California-based Oracle agreed to pay $35 million to settle a class-action suit brought by a group of California employees who said they were wrongly denied overtime pay. IBM agreed to pay $65 million in 2006 to settle claims that it had denied overtime to 32,000 computer technicians.

In 2003, Bank of America, based in Charlotte, N.C., reached a $4.1 million settlement with employees in Washington state who alleged they were misclassified as managers so their employers could avoid paying overtime.

Computer giants such as IBM have invested thousands of dollars lobbying politicians to revise labor law in a way that would allow them to give their computer employees more flexible work schedules, but also to stop paying them overtime.

Certain highly skilled professionals, such as doctors and lawyers, don't qualify for protections such as overtime, based on their income, how they're paid and the work they do.

According to a Congressional Research Service report, the most common justification for excluding these jobs from labor protections is that more highly skilled professional employees are better able to bargain individually over wages, hours and working conditions. They also tend to work on more flexible schedules and in jobs that require evening or weekend work, times that would be difficult for employers to monitor.

Computer professionals were added to this list in 1990, but supporters of revising the law say the law fails to account for the substantial technological changes over the past 20 years. They cite the lawsuits as an example of the need for clarification.

There's no reference to the Internet in the existing law, said Eric Weaver, the director of education and workforce policy at California-based Intel. He said workers sought greater flexibility in when and where they did their work, but the current law made it difficult to grant employee requests to move their schedules around to fit their personal and professional lives.

"What we have now is the law is unclear, so multinational employers like Intel can take jobs and put them in places where the law is less ambiguous," he said. "The intent is not to take overtime from employees entitled to it."

IBM didn't respond to requests for comment, but Randy MacDonald, the senior vice president of human resources for the New York-based company, told Congress last July that employers had experienced an explosion in litigation. Lawyers, he said, "literally troll" for companies to sue by taking advantage of outdated provisions in the labor laws.

He said the classifications must be clarified and updated to better reflect employees' training and income. In today's global economy, companies such as IBM have to think about business in the context of labor costs, he said.

"Competitors are coming from everywhere," MacDonald told members of the House Subcommittee on Workforce Protections.

Sen. Hagan described her bill as a "modest" update that clarifies the law's "outdated list of duties." It helps companies stay competitive and gives highly skilled computer professionals greater autonomy and flexibility in their careers, she said.

"Jobs are my No. 1 priority," she said. "I want to do everything I can to make sure employers have the tools they need to hire North Carolinians and invest in the local economy."

The bill, which has both Democratic and Republican sponsors, has been referred to the Senate Committee on Health, Education, Labor, and Pensions.

Workers are right to articulate concerns about the legislation and the potential for misuse, said Daniel Bowling, a labor law professor at Duke University School of Law, but he said he didn't think the legislation was an unreasonable broadening of current law.

"If there is any work that is capable of being outsourced easily and efficiently, it's anything related to Internet-based services," he said. "This seems to me, on the face of it, to be something necessary to keep a competitive posture and keep jobs in the United States."

Several labor groups plan meetings this month on Capitol Hill to pressure members of Congress to oppose the legislation.

"This bill is a terrible idea at a terrible time," said David Cohen, the executive director of the Department for Professional Employees in Washington, part of the AFL-CIO. "This bill is going to increase the odds that their employers expect more for less. It's going to cut wages. It's going to make it less likely that employers hire. ... And it's going to do that at a time when people who are unemployed need jobs and need wages."

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