IBM fixes overtime problem … with a pay cut — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

IBM fixes overtime problem … with a pay cut

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For years, IBM Corp. was haunted by a big overtime lawsuit filed by its highly compensated technical-support employees. They claimed they should have been nonexempt workers who were eligible for overtime. IBM settled the case for $65 million in 2006. Because the case was settled, a court never ruled definitively whether those IBM workers fit under the professional exemption.

Now, nearly two years later, IBM has reclassified 7,600 technical-support employees, making them eligible for overtime. But the company also reduced their base pay by about 15%. The end result: Most of the newly reclassified hourly employees won’t earn any more than they made before the reclassification, even with overtime factored in.

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