Computer firm IBM has
agreed to pay $65 million to settle a class action lawsuit charging that it
misclassified certain employees as exempt from overtime and failed to pay them
overtime for hours worked over 40 in a week. The suit alleges that IBM
incorrectly classified technical services professionals and information
technology specialists as exempt, even though those positions don’t qualify for
exemption under
or federal wage and hour law because the work is routine and doesn’t require
employees to use discretion and independent judgment. The lawsuit was filed in
January 2006 in the Northern District of California federal court.
Approximately 32,000 current and former employees will share in the
settlement. IBM denied the charges and said it settled the suit to avoid the
expenses of protracted litigation.
Paying Overtime: 10 Key Exemption Concepts
Only one thing really matters in the determination as to whether or not an employee is exempt: The duties the employee performs. Learn how to avoid costly, preventable mistakes with our free White Paper, Paying Overtime: 10 Key Exemption Concepts.