IBM responds to overtime lawsuits with 15% salary cuts

by Volker Weber

IBM in recent months has been hit with lawsuits filed on behalf of thousands of U.S. employees who claim the company illegally classified them as exempt from federal and state overtime statutes in order to avoid paying them extra whenever they worked more than 40 hours per week.

The good news for those workers is that IBM now plans to grant them so-called "non-exempt" status so they can collect overtime pay. The bad news: IBM will cut their base salaries by 15% to make up the difference, InformationWeek has learned.

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IBM Eye comments:

Admired companies don’t act this way. I get the impression that IBM is concerned only with the perception of behaving admirably, but not really being a company worthy of admiration. Before doing something like that, top brass should ask themselves if they would admire it if they saw it in another company. It’s tacky to brag about record earnings and then cut the pay for the people responsible. I understand the plight of companies like Ford who need to fix an unsustainable cost structure, but this really is a different animal.

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