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OT Pay for IT Workers? California Case Poses Challenge for Healthcare Managers

The settlement between the Kaiser Foundation Health Plan and its IT workers on overtime pay will be closely watched at drug companies, where litigation over pay rates is already rife.

Although small, the $2.9 million Kaiser settlement threatens to open up a whole new front in the overtime wars: IT staff. The case concerns Kaiser's "senior business application coordinators," whose job was to train hospital staff to use new software, and to assist staff when the software failed. The business coordinators were required to remain on-call for extended periods, all day and all night, so that they could respond within 30 minutes to any call for help. They also had to run "Technical Dress Rehearsals" on new software outside regular business hours to make sure it worked, and to deliver "Lunch & Learn" sessions to new staff during their own meal periods.

In short, their work was a lot like that performed at drug companies which have extensive IT staff.

At some drug companies, there is already tension between IT staff and management. Pfizer (PFE), for instance, began replacing its IT contract staff with immigrants on H1-B visas in 2008. Some of those staff were allegedly forced to train the people who were replacing them. The issue rankles Pfizer IT staff to this day.

The Kaiser settlement does not create a precedent, but it does pose a challenge to pharmaceutical company managers looking to increase productivity or make cost savings by putting junior staff on salary and then requiring them to work long hours. Doing so, it seems, runs the risk of falling afoul of federal overtime law and may trigger big settlements.

The federal courts are currently split on the issue of whether drug sales reps should receive overtime pay.