Fair Labor Standards Act: Six Things Tech Workers Need to Know

The class-action lawsuit that current and former Apple employees have filed against the iPhone-maker raises questions about what kinds of workers are covered by the FLSA. Here's what you need to know about this often confusing law and your rights to overtime pay.

Mon, August 11, 2008

CIO — The class-action lawsuit that a former Apple network engineer filed last Monday has put tech workers' relationship with the Fair Labor Standards Act (FLSA) into the spotlight. Many IT pros are watching the case with interest since it boils down to a pocketbook issue: compensation for overtime.

At issue: are networking professionals—network engineers, network administrators and network support staff—covered by the FLSA? The plaintiffs contend that Apple misclassified them as exempt from the FLSA so that the company would not have to pay them for overtime. Apple will have to prove that these workers are in fact exempt by demonstrating that their jobs require independent judgment and discretion, and that they're not simply carrying out repeatable tasks, says Jahan Sagafi, a partner with Lieff Cabraser Heimann & Bernstein, the law firm that represented IBM workers in their class action lawsuit against Big Blue in 2006. (The case was settled for $65 million in 2007. It was the biggest settlement of such a suit to date.) [Editor's Note: A previous version of this story incorrectly stated that the case was settled in 2006.]

It's not uncommon for employers to err on the side of classifying employees as exempt, says Sagafi, who worked on the IBM suit. In fact, the dirty little secret among employers and HR departments is that classifying employees as exempt—even if it means breaking the law—is in their best interest provided, of course, that they don't get caught, says Sagafi:

"In a sense, they may see it as economically viable for them to skirt the law and wait to see if they get sued because the exposure is not that huge [if they don't get sued]," Sagafi says. "If they can settle [a complaint] for less than 100 percent of what they owe people [for overtime], they've gotten away with a good deal."

White collar workers like IT professionals can make sure they're not being cheated out of overtime pay if they smarten up about the FLSA. If you work in IT, here's what you need to know about the Federal Fair Labor Standards Act to make sure you get the compensation and treatment that you deserve under the law.

1. The FLSA is a weak law.
The U.S. Department of Labor doesn't have the resources to enforce the FLSA, so it leaves compliance up to employers, says Sagafi. Classifying employees properly is the employer's responsibility. As a result, it doesn't always happen, and the only time employers' actions get tested is when an employee files a complaint with the Labor Department, a state agency, or an attorney.

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