IBM have shocked many of their technical staff with a 15% pay cut! The move comes after IBM was forced to settle a lawsuit brought against them by employees back in 2006. The employees, mainly technical staff, claimed that the company was illegally withholding overtime payments by classifying the staff as exempt from federal and state overtime statutes while they were working over 40 hours per week.
Now IBM has decided that it needs to reclassify 7,600 technical staff as eligible for overtime. Unfortunately the new payroll structure being introduced on the 16th February will also introduce a 15% cut from the base rate of pay for all staff who are eligible for overtime--a move that is said to be directly related to the lawsuits.
IBM is planning to lobby state and federal officials for an opt-out clause allowing technology companies to escape current employment legislation: "IBM believes aspects of the wage and hour laws have not kept pace with the realities of the modern workforce. The company will continue to press the government to update and clarify the law in this area."
Not surprisingly many of the staff are outraged; in fact, IBM's own documents show that one third of the workers whose base rate of pay has been cut are not currently working any overtime--that means they're losing 15% and will have to start working five hours of overtime per week to make up for it, that is if they're offered the overtime at all. A ‘transition package' has been offered to those affected, but I wouldn't imagine that's gone down too well.
Would you want to work for a corporation that calls its staff ‘units' and actively lobbies to have their rights taken away?