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December 6, 2011 By Brian Heaton
A bill introduced in Congress that modifies what job functions in IT classify an employee as a “professional,” may cost some hourly technology workers a bundle of cash.
S. 1747, the Computer Professionals Update Act (CPU Act), amends Section 13(a)(17) of the Fair Labor Standards Act of 1938 (FLSA) by broadening the scope of employees that work in a computer or IT occupation and the duties that they perform. If it becomes law, S. 1747 would severely limit the ability of hourly technology workers making $27.63 per hour or above to claim overtime.
Sponsored by Sen. Kay Hagan, D-N.C., the CPU Act adds language exempting employees from overtime that work on computer networks, databases, information security and other IT job classifications to the law. In addition, the proposed amendment expands the “primary duties” of those workers, including the wording of “network,” “database,” “debugging” and “securing” in various descriptions.
Matt Simmons, a private industry IT system administrator who blogs at Standalone Sysadmin, said that at first, under the assumption that most of his tech colleagues were salaried, he didn’t think the law would have that much of an effect. That perception was short-lived, however, after seeing the results of a nonscientific survey Simmons conducted of his blog readers.
The survey revealed that 26 percent of the United States respondents answering were hourly workers. Simmons said he was “blown away” at the percentage, suspecting that it would be much closer to 10 percent. He added that after seeing the results, the CPU Act could have a significant impact on those in the industry that depend on overtime income.
“Eliminating that portion of their paycheck isn’t going to do them any favors, particularly in this economy,” Simmons said.
Jonathan Reichental, current CIO of O’Reilly Media, a publisher of technology and innovation books and resources, who starts a new position as CIO of Palo Alto, Calif., on Dec. 13, said it feels like the bill is being introduced with very little analysis.
“I’m not sure who it’s serving, frankly,” he said. “It seems to be definitely better for the organization than it is the individual. If you think about elected leaders, why are they fighting for corporations instead of for the worker? That certainly seems to be misplaced effort.”
When contacted by Government Technology, Hagan’s office declined to address the specifics of the bill, saying it “simply updates” the FLSA with more modern terminology.
“Over the last 20 years, the industry has changed dramatically,” a Hagan spokesman said in an email to Government Technology. “Sen. Hagan’s CPU Act maintains the original intent of the exemption by modernizing the primary duties test for certain computer professionals in order to keep pace with a rapidly changing industry.”
Far-Reaching Impact
But not everyone agrees with the extent of those updates. Simmons said the proposed amendment to the FLSA is broader in terms of the amount of people it ropes in.
However, in order to be exempt from overtime, both under current law and the CPU Act, IT workers must be paid $27.63 per hour or more, which translates to approximately $57,470 based on a 40-hour workweek.
When asked whether a significant amount of hourly IT personnel make that type of pay, Simmons — who admitted he is a salaried employee — said using a nationwide dollar figure is a problem because the answer would depend on where a person works.
“I think it is more likely in urban areas where there is the highest concentration of tech jobs, you are going to see people approach that [figure],” Simmons said of IT workers making more than $27.63 per hour.
He added that places such as New York City and other big cities in the Northeast Corridor or tech-centered communities such as Silicon Valley and the Research Triangle in Raleigh-Durham, N.C., are all going to have people who are affected by the CPU Act if it becomes law.
Reichental wasn’t so sure. He said that a rate of $27.63 per hour isn’t unusual for a seasoned system administrator, but wasn’t sure what percentage of people were making that level of pay as hourly employees.
“In my experience in the businesses I’ve worked with and had exposure to, it’s more common that people are salaried than hourly,” Reichental explained.
In trying to understand the motivation for and genesis of the CPU Act, Reichental felt that many businesses underestimate the totality of IT costs and purchase a system figuring in the price of the product and its installation, but not the entirety of that system’s life cycle.
“I think what companies are realizing [is IT life cycle costs] are very expensive and part of this law is trying to manage costs,” Reichental said.
Catering to Big Business?
In his blog, Simmons pointed out that Hagan’s top-20 contributors included such companies as Bank of America, Blue Cross/Blue Shield and Time Warner — all of which he believes may have IT costs they’d like to have lowered.
“I find it unlikely that Hagan and her co-sponsors of the bill, of their own volition, would take it upon themselves to do this,” Simmons said, in an interview with Government Technology. “It’s unlikely it was an independent decision on their part. I suspect [there are] other things at hand.”
Reichental questioned the timing of the bill.
“[There’s] some motivation behind it, somebody is lobbying for it and if you think about all the priorities we have as a nation, all the economic problems we have, is this worthy of committees and time?” he asked.
You may use or reference this story with attribution and a link to
http://www.govtech.com/education/Congressional-Bill-IT-Worker-Overtime-Pay.html
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We in NC know that she gets her backing from elsewhere. She does fund raising in Yankee-land, so what do you expect? We're accustomed to being influenced by outside parties who want our state to be as screwed up as theirs. This change is definitely motivated by big business interests, like expansion of H1's that are needed to bring cheap, inexperienced programmers into the country so businesses don't have to train or pay their staff.
May I be the first to say HELL NO. It is bad that IT staff are subcontracted into poverty, by Harvard MBA trained types the practice ENRON Accounting. The Between the H-1B visa program and other scams, this is yet another step. The TRUTH is no major firm can make money with out IT operations. Command is nothing without control and communications. I oppose this bill. In the end this can not save any money, as it will backfire.
This cap has been placed on Federal Employees working in the emergency sector for years. If you are at a certain pay grade you get up to a max and that is it. For many it equals the amount that you recieve for normal working hours, this means weekends, nights and even when called back in after working a full shift there is not overtime. There isn't even shift differential, which is a small addition if you are called back in and work into the early hours of the following day. I think if you work overtime you should be paid overtime rates, the common 1 1/2 doesn't exist any longer.
Funny, how every effort is made to reduce employees into worker ants, as the number of un-effected contractors keeps going up. Another win for consulting firms, visa holders and lobbyists.
I am a federal worker (GS pay scale), and haven't been paid a dollar overtime most of my career. I do get paid at "regular" time pay for any additional hours I work, but no overtime. Before they made a change a few years ago, I actually got "less" than normal pay for overtime hours. It is funny how our "government union" workers not only get time and a half (1 1/2), but can also get double time (2) in some cases. By the way, the tax payer buys clothes and other things for these guys that they deem as necessary for their job. I buy my own clothes.
Why is Govt. meddling with free business ? The contract is between the IT worker and the company. Why there is a law to limit the compensation agreed between the IT worker and the company. Is this another form of bonded labor ??!!! Govt. should stay away from this.
Has anyone here actually read the existing FLSA? Really, all this does is change terminology since the existing law was written back in the days of mainframes. Here is the current description of "computer-related" work: "The employee’s primary duty must consist of: The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications; The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or A combination of the aforementioned duties, the performance of which requires the same level of skills." So, most of the people you are worrying about are actually already covered by the existing bill. As for "far-reaching impact" - you couldn't cite a single statistic about how many, IF ANY, this bill would affect. You just put in a lot of spurious speculation from people who know absolutely nothing. Get a grip, people - this is not FOX news.
IT is a vitial role in any business and one that can bring a business to a stand still. If the business does not staff properly and have resource for its IT department they should have to pay teh workers they have to stay overtime and fix the problem. For some reason the Federal Government think that 27.43 is some magical number and that making over that is a crime.
pn is exactly right. WHY does the federal government care if a company pays an employee overtime? For the record I am salaried so this bill doesn't apply to me. But it seems ridiculous that congress should even care.
Wow! So now the Government will decide how much you are going to make; no matter how much you have to work. Hmm, Sounds more like we are fast becoming the Communist States Of America. So where the hell is the Free Market Economy ?
They've already done this in California and look how well the IT industry is doing there!
The corporations care. Free overtime labor is great for them. If it is great for them, then it is great for their pets (Congress Persons). So congress passes laws to protect the million dollar wages of the CXOs at the expense of the workers. And, I bet if you don't want to work over time for free - you will be fired.
S. 1747, the Computer Professionals Update Act (CPU Act), seeks to weaken the Fair Labor Standards Act of 1938 (FLSA) by exempting a larger portion of the IT workforce in the US from the current law. It’s bad legislation. The FLSA was enacted to provide more opportunities for employment to the great numbers of people who find themselves out of work during economic downturns. It penalizes employers by requiring them to pay staff at 150% of their normal hourly rate for time worked in excess of 40 hours a week. This is how it is meant to work. Prior to passage of the FLSA, a particular employee working 80 hours a week earned, say, $80 weekly. After the FLSA was passed, the employer found himself having to pay that same employee $100 for 80 hours of work. The FLSA motivated employers to hire additional workers, thereby spreading the wealth to more people. Instead of one employee working 80 hours, you now had two employees working 40 hours each. Instead of having to pay one employee $100 a week, the employer now paid two a total of $80, or $40 each. Amendments over the last 8 decades have weakened the FLSA , by making more people exempt. As a result, more people are out of work, the current job market favors employers, employee compensation hasn’t kept pace with inflation, and people are working longer hours, but taking home less money. Instead of supporting S. 1747, our elected representatives should pass laws to strengthen the FLSA. I'd rather see larger numbers of people being provided with more opportunities for employment, than to see a small number of corporate fat cats further enriched by not having to pay decent wages to hard-working IT professionals.
This is another piece of distructive legislation. The IT field is a very demanding and high stress field, overtime is often expected. And in our society our ansestors have fought long and hard for us to be paid fairly. Anyone who works for an hourly pay be it $10.00 an hour or $100.00 an hour should be entitled to overtime after 40 hours. I hope this measure does not pass, otherwise it will open more doors for trash measures like this. And I am sure the Senator who sponsered this measure is benefiting greatly. Shame on them!!!
Here's the other side of the issue... I can understand why companies should have to pay "premium" overtime (at 1.5X the hourly rate) for lower hourly employees, <$27.63/hr - so as not to take unfair advantage of low cost labor. However, for many of the IT workers making considerably more, if companies are forced to pay OT at 1.5X, they will reduce or even cut-back on the possibility for any overtime at all because it will be too cost prohibitive. Therefore, those employees who now welcome the extra work hours for extra regular pay, will be penalized because their schedule will be limited to just 40 hours/week. And mandating premium OT pay provides just one more economic reason for companies to push even more work offshore. So all of us need to be careful for what we wish for!
Yes, Deb, some of us have read existing FLSA and are stuck in the middle of enforcing it. (And it's not pretty to determine exempt vs. non-exempt when it comes to who is eligible for O.T.) That said this is not just a simple update. But what prompted me to respond was your point: "you couldn't cite a single statistic about how many, IF ANY, this bill would affect..." So, I ask this: If it isn't broken, what exactly are we are trying to fix, and why? It all seems rather spurious to me.
I work for the federal government. We have union electricians making $40 per hour and they still get the overtime at 1 1/2 or double time. I guess the government can afford it, even if the private sector can't, because the government doesn't seem to have limits on spending.
Already IT workers are subject to overly optimistic and often ludicrous delivery schedules imposed to meet arbitrary management goals and timetables (or to win bids) without consideration of what is actually required to do the work or possible uncertainties that may be encountered. An example is Agile methodolgy - do things in bits and pieces at small costs and small timetables with the hope they will all fit together and not corrupt preexisting databases when lightly tested items are deployed. So bosses can not face employees and contractors citing the same guidelines and saying, "If you want me to put in crazy hours to TRY to make this project happen on your schedule, you must compensate me something for loss of personal life and family time and mental and physical exhaustion." Most often NOT 1.5 time but comp time or OT at 1.0 time is involved as IT staff are asked to make up for poor planning. Now they will have the right to say - it is your job -- there is no limit on hours. How would the bosses like to sit there with you as well? I remember in 1985 when MANY DC IT companies began to tell employees the minimum work week is 55 or 60 hours - not to get ahead but to keep from being fired. Here is the chance to beat up the troops even more in a difficult job climate. Yes job descriptions need updating but don't throw the staff bodies on the altar of cheap. I think it has been established that abused employees do not perform as well. Pass that along to the bean counters.
Basically it's one more attack on the 40-hour work week. If it costs my employer the same amount for me to finish a 1200-hour project in 20 weeks (60 hours/wk) versus 30 weeks (40 hours/wk) then they're going to expect it to be done in 20. And the standard of living will go down for one more piece of the middle class. The same logic applies to salaried employees, it's true, but salaried employees also generally receive more benefits, are harder to fire, etc. The thing I don't get, as others have noted, is why these rules are based on job role. What is the legal basis for treating somebody operating a server farm differently from somebody operating a forklift?
No, it's not Fox news you partisan slob! It's about our middle class, our country and our children's future. Placing a wider net over exceptions to fair pay creates an skewed environment in the workforce. WHy are computer related skilled workers exempt from fair labor laws in the first place? Mostly to help a new industry get off the ground...in the last century! But in todays market place of employment, you can hire an H1B visa holder, call them a computer worker, work them 100 hrs a week and always on-call for salary! What kid in college would want that job? Very few and that's the real problem. That's why we are graduating fewer computer skilled people into our workforce. $50,000 a year in 1980 equals about $135,000 today. STARTING OUT! That woulkd buy a lot of beer, and things would be going great and I would have to wear dark glasses. If that were the pay, you would have plenty local kids graduating at the top of their computer science class.
This is just another example of this administration meddeling in the free market system. I am so sick and tired of this. Just watch, if the bill dosen't pass there will be a new regulation.
Thank you BORG2U.
To be fair this is actually more free enterprise (and no I don't support it). Currently, Overtime HAS TO be paid to non-exempt employees as dictated by the Federal labor laws. This bill is attempting to carve out a huge exception to the Federally mandated overtime laws so that employers don't have to pay overtime. Employers COULD still pay it but they would no longer be obligated to pay it. I think this is a ridicolous attempt to subvert wages and is par for the course for our current work environment, however this is closer to free enterprise where everything is negotiated according to supply and demand. Hard to believe we're going backwards but that appears to be the case.
I’m not surprised about this bill. What surprises me is this that our “innocent” citizens still hope for the best from elected officials especially Congressmen and US Senators who are there to simply protect the Big Fat Cats, not common people. Please take couple of minutes and watch an eye-opening video of our “characterless” representatives: http://web.gbtv.com/media/video.jsp?content_id=20021799&topic_id=&tcid=vpp_copy_20021799&v=3. God Bless America!
Wow. Are there honorable men and women who are running for election in 2012? God help us.
Jobs will be restructured to salary positions at levels commensurate with the time commitments and responsibilities, otherwise people will leave for better paying jobs. Other than cause people and companies a few headaches as it all get's worked out, what will this bill really accomplish?
Maybe you should watch Fox news once in a while. You might realized how biased the other networks really are. The bias isn't in what they report, so much as what they choose not to report. Sure, they all have some bias, which is more a reason to watch both, and try to sift through the nonsense. Frankly, I see both sides represented on Fox, a rarity for the other networks. Maybe you should stop getting your "news" from the airheads on the "View," and try the BBC instead.
IT workers making 27.63 per hour or more defines a specific subset of IT workers, contractors. B of A, Blue Cross Blue Shield, etc... mismanaged their IT to the extent that it became clear it was a good idea to pay someone (say IBM) to pay someone (AT$T) to pay someone (local consulting firm) to maintain their infrastructure. Now they're being raped by the process and they're trying to stop the abuse. I'd love to hear that B of A's IT infrastructure suffered a weekend outage that wasn't fixed until 8:00 Monday a.m. because no one was being paid to fix it.
I so agree with this post. You work a regular 8 hour, stressful, shift then have to log on from home and realize that you or one of your team members has to go into the office. Because you are a salaried employee it cost the business nothing for your time. It says nothing for the cost to the employee working all of the overtime hours for free. All IT employees should be paid hourly with overtime. If the corporations of this country can abuse your time they will and they do. I know first hand as many others do. The time that is worked for free puts stress on the family life of that individual as well as his or her health. We have no union protecting our wages like the electricians or Iron workers or any other unionized jobs in the Blue Collar industry. We, IT workers, are taken advantage of and it needs to stop. Companies do not seem to realize that IT is now embedded within their business. They say the "Marketing dept makes money" well the marketing department or any other department in any company cannot make money these days without IT. We need to stand against stupid bills such as this one made by people in a political office who have no idea what it is like to live and work in an IT environment...
Great, so now I get, NO OT in addition to No benefits at all. As a contractor, I have NO paid vacation, NO sick days, no health insurance, NO 401k, and now I won't even get paid if I have to work OT. Grrrreat. Thanks Hagan.
if this passes, it will lead to other industries, like blue collared workers. I suggest that if it passes find out who voted for it and end their over time as well as a any regular time pay by voting them out of office.