IBM accused of cheating its own executive assistants out of overtime pay

IBM has been accused of cheating its executive assistants by denying them overtime pay and meal breaks and retaliating against them for accurately reporting their working hours.

A lawsuit [PDF] filed Tuesday in New York City alleges IBM broke the federal-level Fair Labor Standards Act and local labor laws by denying non-exempt employees overtime pay, unlawfully making deductions from their wages, and filing inaccurate wage statements.

Such practices amount to wage theft. According to the non-profit Economic Policy Institute, "between 2017 and 2020, more than $3 billion in stolen wages was recovered on behalf of workers by the US Department of Labor, state departments of labor and attorneys general, and through class and collective action litigation."

Wage theft takes several forms, including minimum wage violations, overtime abuse, off-the-clock violations, meal break violations, illegal salary deductions, tip-related violations, and employee classification issues.

Faced with a series of overtime lawsuits in 2008, IBM reportedly allowed workers to be classified as "non-exempt" – so they were eligible for overtime – while slashing their salaries to compensate for the expense. In 2020, Big Blue was forced to shell out about $9 million in backpay to underpaid IT staff in Australia.

According to a paper by Rutgers researchers that was published in The Economic and Labour Relations Review (July 2021), "Wage Theft in the United States: towards new research agendas," lax enforcement of labor laws has meant that wage theft is seldom detected and rarely has economic consequences for employers.

"Even if an employer is caught, the penalties are generally not severe enough to change their future behavior," state authors Joy Jeounghee Kim and Skye Allmang.

The current complaint against IBM in the US was filed on behalf of plaintiff Cheryl Burgard, who worked as an executive assistant at Big Blue for 37 years until she left in February 2023. Her responsibilities included managing executives' schedules, coordinating their travel, and submitting expenses.

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Executive assistants report to IBM’s Global Administration department in Armonk, New York. They're paid hourly and typically work Monday through Friday, 0830 to 1715, with a 45-minute unpaid lunch break, though it's argued they often work outside that schedule.

According to the complaint, Burgard "worked off the clock because IBM made clear that it would not allow her to log significant overtime without retribution."

IBM allegedly required Burgard to log her hours using electronic timekeeping software, and has logged evidence of hours worked using access badge reader data and other electronic interactions with its systems.

Yet, the complaint contends, when managers in IBM's Global Administration met Burgard, they "made clear that, if she logged her true hours worked, it could cost [Burgard] her job."

When Burgard complained to Global Administration and Human Resources, she, like other executive assistants, allegedly faced retaliation in the form of negative performance reviews.

IBM, the complaint says, "discouraged [Burgard] from reporting her true hours worked and complaining about nonpayment of her wages by issuing her negative performance reviews which had direct financial consequences."

And it is further claimed Burgard regularly worked for 30 minutes during her 45-minute unpaid lunch break but had that full period deducted from her paid time.

The lawsuit seeks to be certified as a class action. If approved by the judge, that would allow the attorneys to seek damages for denied wages on behalf of an estimated 400 to 600 executive assistants employed by IBM over the several-year period covered by the applicable statute of limitations.

IBM did not respond to a request for comment. ®