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| Sweat Equity Tech workers sue to get paid for long hours Laura Hamburg |
Friday, March 24, 2000
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First, Rex Bothell racked up 60- and 70- hour workweeks with his former high-tech company without getting a cent of overtime pay. Then, the firm laid him off when the disc drive industry took a downturn. Now, Bothwell is striking back to get back the pay he believes he deserves. ``Until the day I was laid off, all those hours I worked -- sometimes 16 hours in a day -- I thought when this company really starts rolling, they'll take care of me,'' said Bothell of Concord, who worked as a field service engineer for Phase Metrics, a global disc testing company with an office in Fremont. ``Instead, I was water under the bridge. They just said bye-bye.'' Bothell is suing for 650 hours of back overtime pay. He joins dozens of other Bay Area high-tech workers who are taking their companies to court or who recently won sizable settlements for overtime pay. In addition to suits filed by individual workers, 1,600 plant engineers are suing Pacific Bell for up to $100 million in back pay in what could be the costliest overtime pay class-action lawsuit in California history. The burst of overtime litigation comes against the backdrop of a new state law that requires overtime pay after eight hours of work in a day and broadens the reach of the law to include more workers. The lawsuits are a reaction, in large part, to a failure by a growing number of fledgling startup companies to grasp labor law and to companies that purposely manipulate the law to get more work out of their bedraggled employees, according to the state labor commission. At the same time, workers are learning that suing for overtime is an effective way to wrench compensation from high-tech companies that dangle the promise of a fat payoff in the future in exchange for long work hours. ``A lot of it is the Silicon Valley gold-rush mentality,'' said attorney Michael Herrick, who represents Bothell in his case against Phase Metrics. ``There is this complete ignorance by the employee and the employer that they are all going to strike it rich and that workers should sacrifice themselves and compromise their families now because they'll be rewarded down the road. But what happens when it doesn't work out?'' Most of Herrick's cases are overtime cases -- he says he has a ``drawer full of them.'' His clients accuse the firms of denying them time-and- a-half pay for overtime by misclassifying them as administrators, professionals or executives -- all legally exempt positions in which employees are not paid overtime no matter how many hours they work, he said. In addition to alleged naivete about workplace rules, the increase in lawsuits also stems from exemption abuses by California companies that went mostly unchallenged because the labor enforcement arm of the state was severely weakened by Republican administrations, said Michael Moreno, principal analyst with the state Industrial Welfare Commission. ``There were lots and lots of abuses because the computer professional industry was making their own interpretations of who was exempt and who wasn't, from overtime,'' Moreno said. ``But they can't expect to work people 50, 60, or more hours a week without paying overtime. We have the teeth now to enforce the law, and complaints will be investigated.'' Before the law changed, California companies for almost the past two years didn't have to pay overtime unless workers were employed more than 40 hours in a week and made less than $27.63 an hour, or fell under one of the exempt career categories. California had a long history of paying overtime after eight hours per day until a controversial decision by the Industrial Welfare Commission, whose members supporting the change were appointed by then-Gov. Pete Wilson. They changed the rules from requiring overtime for any work over eight hours a day to overtime for any work over 40 hours a week. The new state law, which kicked in at the beginning of this year, restores the right to overtime after 8 hours in a single day. It also broadens the coverage to include more workers, regardless of higher pay. Up until the change in the law, state rules followed federal regulations and exempted overtime pay to workers making $27.63 or more. The new state law means anyone from minimum-wage workers to $250-an-hour temporary computer consultants are now eligible for time-and-a-half pay. Some firms, particularly those that employ pricey temporary computer consultants, are gearing up for a fight to revamp the law in a way that will be less costly for their companies. And some temp workers are worried they may lose future jobs to their colleagues who do qualify for overtime exemptions -- and who may be more tempting to a company that relies on intense periods of concentrated work to meet a deadline or make a product. ``The Industrial Welfare Commission needs to carefully thread a needle and make sure neither employer or employees get stuck in the eye,'' said Carl Guardino, president and chief executive officer of the Silicon Valley Manufacturing Group, which represents 160 high-tech members. According to Guardino, Silicon Valley companies are adopting a wait-and-see attitude about the new law. ``The real tragedy would be to lose any flexibility, which is beneficial to the economy (and) the worker, and fundamental in the information age.'' As part of the new law, the labor commission agreed last month to appoint a wage board made up of employees and employers to evaluate overtime exemptions. The idea is to help clarify for companies and employees whether workers such as Bothell are exempt from overtime rules. In Bothell's case, he was installing and fixing machines that test discs in the hard drives of computers. He made around $24 an hour as a salaried employee. Over the year he worked for Phase Metrics, he averaged 57.5 hours a week. There were days he worked 14, 16 or 18 hours a day. He wore a pager 24 hours a day and responded to clients' calls on weekends and in the middle of the night. The company told Bothell he wasn't eligible for overtime because he fell under the administrative exemption -- a category reserved for highly skilled managers who make policy for a company instead of helping produce a product. ``That's baloney. They taught me how to do the work,'' Bothell said. ``I have been a mechanic all my life and they are trying to compare my position to an engineer who makes twice as much money as I make,'' he said. ``It doesn't matter what title you give me. Call me janitor, call me specialist, just pay me what I am worth.'' The company stands by its decision to use the exemption. ``We feel we properly handled our wage and employment matters and vociferously defend our practices,'' said Dewey Hockemeyer, chief financial officer at Phase Metrics. It's not just the employers who have to navigate the sometime fuzzy laws around overtime. Workers themselves are full of misconceptions about overtime. ``The most common one is people think if they are on salary, they are not entitled to overtime,'' said Bay Area attorney Mark Thierman, who is representing the 1,600 workers suing Pac Bell. ``What matters is what you spend your time doing on the job, not that you're on salary or that you have a particular job title.'' In the Pacific Bell back-pay case, the battle is over exemptions. Pac Bell said workers didn't qualify for overtime. ``We feel there is an administrative exemption for these workers and we believe we are following the law,'' said Rodd Aubrey, a spokesman for Pacific Bell. The ``administrative'' category is a kind of vague catch-all exemption that is most often abused, Thierman said. Administrators are exempt only if they ``customarily exercise discretion and independent judgment'' in making decisions for the company, such as dictating human resources guidelines or tax policy, labor attorneys say. Executives are exempt if they spend at least half their work time supervising two or more people, according to the state labor commission. And professionals are those who are prohibited from working in their field unless they hold a specialized degree such those held by a CPA, doctor, lawyer, teacher or engineer. The exemptions were developed as a response from industry lobbyists as the nation made the transition from a manufacturing economy to an information economy, according to labor law specialists. In the 1930s, when the bulk of the nation's wage and hour laws were written, the idea was to put more people to work. If the factory forced one worker to do the work of two people, that was one less person with a job, so overtime kicked in as a penalty. ``Now, just because someone is working on a computer instead of a carburetor doesn't change the nature of the work,'' said Herrick, the attorney representing Rex Bothell. ``If you are collecting research, providing content, troubleshooting, programming systems, writing software, you are producing the product of the company. And you should be getting paid overtime.'' And what about Bothell? The day after he was laid off at Phase Metrics, he got a salaried job at Zygo Corp. in Sunnyvale, doing the same work. Only he gets paid overtime. |
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