Bill seeks to limit Overtime for high-tech workers

Feb. 06, 2012
Bill seeks to limit overtime for high-tech workers
Franco Ordoñez and John Murawski | McClatchy Newspapers


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

Some of the multinationals 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 see it as an effort to squeeze more work out of employees for less pay in an industry notorious for killer hours and all-nighters.

U.S. Sen Kay Hagan, D-N.C., introduced the federal legislation last fall to expand the kind of technology workers who currently are not automatically entitled to overtime. The bill, S. 1747: Computer Professionals Update Act, would expand the pool to those whose job duties include securing, configuring, integrating and debugging computer systems, she said.

Jim Kerick, a client support engineer at NetApp in Research Triangle Park, has a salaried position and doesn't put in a lot of extra hours. But Kerick still is worried about the revision. He says he's been laid off three times because of industry ups and downs, and he knows no one 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 Garner home. He's not eager to work such long hours again regularly without being compensated for it.

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

Recent graduates entering computer fields can collect tens of thousands of dollars in debt building their skills. Michael Youngblood, an assistant professor in the computer science department at UNC Charlotte, said this legislation would give companies a greater ability to overwork young hires without compensation for long hours.

"I think this is just a step, in my opinion, in the wrong direction," he said. "We're essentially devaluing the skills of technology workers. ... Now, you're essentially cheating them out of a fair wage or overtime."

The potential impact across North Carolina is significant. More than 90,000 people in the state work in computer-related occupations, including 40,000 in the Triangle and 24,000 in the Charlotte area, according to the N.C. Department of Commerce. 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 are already not entitled to automatic overtime pay, which is defined as time and a half after 40 hours of work in a work week. 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 a fixed salary of at least $455 a week ($23,600 per year) or an hourly wage of at least $27.63 and who perform job duties such as systems analysis and programming are not entitled to automatic overtime pay.

Employers are seeking 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, which is one of the Triangle's largest employers with about 10,000 people, agreed to pay $65 million in 2006 to settle claims that it denied overtime to 32,000 computer technicians.

In 2003, Charlotte-based Bank of America 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 clarify labor laws 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, do not qualify for these protections based on their income, how they are 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 a more flexible schedule and in jobs that require evening or weekend work - times that would be difficult for an employer to monitor.

Computer professionals were added to this list in 1990, but supporters say the existing 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 is no reference to the Internet in existing law, said Eric Weaver, director of education and workforce policy at California-based Intel. He said workers seek greater flexibility in when and where they do their work. The current law makes it more difficult to grant employee requests to move their schedules around to fit their personal and professional lives, he said.

"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 did not respond to requests seeking comment, but Randy MacDonald, a senior vice president of human resources for the New York-based company, told Congress in July that employers have 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 also updated to be more reflective of 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 and Protections.

Officials at Triangle technology stalwarts SAS, Red Hat and Lenovo were not available to explain how Hagan's legislation could affect their workers.

It's unclear how many programmers, analysts and web designers would be affected by the proposed legislation, but the goal is to make overtime pay for these kinds of workers an exception, not the norm.

Hagan, a Greensboro Democrat, described her bill as a "modest" update that clarifies the existing law's "outdated list of duties." It helps companies stay competitive and gives highly skilled computer professionals greater autonomy and flexibility in their career, 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 Committee on Health, Education, Labor, and Pensions.

Workers are right to be articulating 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 feel 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."

North Carolina lost roughly 9,600 information technology jobs last year, according to statistics compiled for the N.C. Technology Association. The climate of insecurity has turned some once-brash technology workers into stressed-out contractors just grateful to have a job.

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

"This bill is a terrible idea at a terrible time," said David Cohen, executive director for the Department for Professional Employees in Washington, D.C. "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."