Wage Woes

Exaldo Topacia often missed his daughter's piano recitals and softball games during the year he spent installing and maintaining computer software and hardware for IBM's New York support division. Now he wants the company to pay him back overtime for the 45 to 50 hour work-weeks he says he often put in. Early this year, Topacia joined current and former IBM technical support workers seeking to represent tens of thousands of workers nationwide in a suit alleging violations of federal and state wage and hour laws. Filed in U.S. District Court in San Francisco, the complaint may turn out to be the largest overtime class action in history.

IBM is the latest corporation to fall victim to an explosion of wage and hour litigation. Last year, insurance giants State Farm and Allstate agreed to pay $135 million and $120 million respectively to claims adjusters who asserted their right to overtime pay. And a quick scan of this year's headlines shows employers in a range of industries socked with large settlements or verdicts:

Publicity over a controversial 2004 revision of the federal overtime rules, which was intended to clarify who is eligible for overtime, heightened awareness among employees, including some white collar workers who realized for the first time that they qualified for overtime.

Meanwhile, employers were asleep at the switch. Many operated under the mistaken belief that all salaried employees are exempt from overtime, says Brian Bulger, partner in Meckler Bulger & Tilson in Chicago. In fact, only certain categories of employees defined by their job responsibilities are actually exempt.

"They will claim they are the production workers of those industries," Bulger says.

While employers eventually will stem the tide of wage and hour cases by tightening up their payroll practices, much as they did their termination and sexual harassment policies in past decades, the fact that the laws favor employees will propel litigation for the foreseeable future.

Senior Editor

Mary Swanton

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.