Careful what you wish for at IBM — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Careful what you wish for at IBM

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Victory wasn’t so sweet for thousands of employees who sued Armonk-based IBM claiming the company had illegally classified them as exempt.

IBM agreed to reclassify them, making them eligible for overtime pay. The catch? The company cut their salaries by 15% to make up the difference.

IBM restructured its pay scales in February, cutting base salaries across all units eligible for overtime. Big Blue said maintaining existing pay rates while granting overtime would result in “costs that exceed competitive levels.” Approximately one-third of workers whose pay will be cut aren’t currently working overtime.

IBM is lobbying for exemptions for high-tech companies to current overtime thresholds, arguing that “aspects of the wage-and-hour law have not kept pace with the realities of the modern work force.”

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