Overtime pay dispute costs IBM $65m

$65m settlement but no liability says IBM


If you work for IBM there’s some good news; the firm is to pay $65 million to settle a class action lawsuit related to overtime pay.

The lawsuit was originally filed in the federal district court in San Francisco and it specifically focused on the current and former IBM employees in the “Technical Services Professional” and “Information Technology Specialist” category.

The suit alleged that some employees were classified as exempt from overtime under the Fair Labour Standards Act and certain state laws. It is claimed that these workers should have been classified as non-exempt and paid overtime wages. IBM said that litigation would be lengthy, burdensome and expensive and they have decided to resolve it instead. It added that it has established “a provision for the probable settlement of this case in the third quarter of this year”.

"Litigation of this case would have been lengthy, burdensome and expensive, and IBM chose to resolve it, without admitting any wrongdoing or liability, for a total of $65m," IBM stated yesterday. "IBM states that during its 90-year history as a major employer in the US it has a long-standing and proven track record in accurately and appropriately paying many hundreds of thousands of employees. IBM continues to believe that its payment practices are fair and comply with all applicable laws and regulations."

Under the terms of the settlement, which is still subject to final approval by the Court, each qualified individual in these two job categories will be entitled to apply for a payment, in accordance with an agreed formula, in full and complete settlement of all claims in the case.

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