California Overtime—the Great Divide

October 28, 2011, 8:00AM. By Jane Mundy

Sacramento, CAUndoubtedly a lot of California employees who are paid hourly, who have worked more than 40 hours per week and have not been paid California Overtime are outraged at the recent news: A California nurse last year made $269,810 by tripling her regular wages with overtime hours.

Not only did Jean Keller, a nurse in a California men's prison, make this amount of overtime, Bloomberg (Oct. 26, 2011) reported that according to state payroll data, California's public workers collected $1.7 billion of extra pay last year with more than half of that amount in overtime. In the state of California, government workers, firefighters, city managers and some computer specialists (to name a few professions) are paid more—for the same duties—than any other state. One computer specialist who worked in the legislature's legal office made $61,905 in overtime, which was almost the same amount as his salary.

Meanwhile, to cut budgets when faced with a $19 billion deficit, more than 30,000 teachers were fired in California since 2007. And California overtime lawsuits are rampant, from truck drivers and limo drivers to Starbucks baristas to stockbrokers.

California wage and hour attorneys, however, are helping outraged employees whose employers have violated the California labor code by not paying overtime. For instance, attorney Mark R. Thierman settled for $18 million in 2003 on behalf of Starbucks store managers in California who were misclassified. In the last few years, Thierman has helped stockbrokers obtain huge settlements, as well as many "blue collar" professions, such as Limo Drivers. Currently, Walmart is facing about 80 wage and hour suits, and countless overtime cases have been filed on behalf of truckers, delivery drivers, construction laborers, poultry processors and restaurant workers.

Getting back to the computer specialist who raked in more than $60,000 in overtime—he is likely an exception. Thierman believes that countless computer workers have commonly not been paid for their extra hours, mainly because workers in the IT industry have been misclassified. Recent IT wage and hour settlements include Siebel Systems that agreed to pay $27.5 million in overtime to about 800 software engineers, and IBM, which is paying over $65 million to technical and customer support workers.

While companies are settling huge overtime lawsuits, the state of California is shelling out overtime pay to its agencies, to the tune of $906 million in overtime last year. Almost three-quarters of that amount went to staff in prisons (e.g., Keller), mental-health hospitals and the highway patrol.

According to Lynelle Jolley, spokeswoman for the Personnel Administration Department at California's prison health care system, paying so much overtime to Nurse Jean Keller is "still cheaper than hiring an additional worker full time to cover the overtime hours, because the state would also have to pay the new worker benefits that can equal one-third of salary...When you look at individual employees, some of them rake in a lot of money, but from the employer's perspective you have to ask is that cheaper than paying to have someone else on the payroll."

One blogger on calcoastnews summed up Keller's outrageous amount of overtime pay succinctly: "The government's answer to this is that overtime is cheaper than hiring someone else. Give me a break…whoever authorized that person to work that much should be fired. I certainly hope that I never have to be treated by someone [a nurse] who has had to work those hours; the quality of care has to suffer no matter how qualified they are."

Wage and hour attorneys like Thierman are closing the overtime divide—perhaps now it is time for the state of California to do the same with its employees.