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Congressional Bill Would Limit IT Worker Overtime Pay

An update to the Fair Labor Standards Act of 1938 would exempt additional IT employees and job functions from overtime compensation.

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.