Overtime Pay for California’s Computer Industry

andreas.com FAQ: Overtime in California

How the NWU Protected Overtime Pay for Silicon Valley Tech Writers

By Andreas Ramos

(Palo Alto, September 2000) In April 2000, overtime pay was enacted for all who work in California. A new law (AB60, Assembly Bill 60) established the 40-hour week and mandated overtime pay for work over 40 hours.

In reaction, the NACCB (the recruiter association) made a number of legislative manuvers to eliminate overtime pay.

At the Sacramento hearings, the employer associations tried to have the law re-written so that managers would not be paid overtime. They offered a new definition of a manager: someone who is involved in customer relations. If a kid at Taco Bell wipes up spilt ketcup, she is doing customer care, which makes her a manager, so she gets no overtime pay. In short, a Taco Bell would have 62 managers and no workers.

You’ll laugh, and so did the packed hearings at Sacramento, but the employer associations seriously proposed this. They wanted to reclassify every worker in California as a manager and thereby avoid overtime pay altogether.

To stop the NACCB, I led the NWU (National Writers Union) technical writer trade group to build a coalition of labor unions and other groups. We put together a large collection of online lists and notified them about this issue. We asked people to send emails and letters in support of overtime pay to the State Labor Commission. We worked with the California Labor Federation, an association of several dozen unions in California. A group of NWU core members went to hearings at the state capitol in Sacramento. The State Labor Commission appointed myself and Bruce Hartford, both directors of the NWU, to the state wage board for Silicon Valley workers.

Due to the flood of emails in support of overtime pay, the coalition that we formed, and the fact that Bruce and I were appointed to the Silicon Valley wage board, the recruiter association realized that they could not win with that strategy.

So the recruiter association took up another strategy: they would write a new law that stripped away overtime pay.

Some of you are wondering, how can someone write a law that takes away rights from other people? Is that legal?

The recruiting industry is a ten-billion dollar industry. They were in danger of losing hundreds of millions of dollars. They make massive campaign contributions. The USA is a democracy. The best that money can buy.

The recruiter association had two options in writing a new law: they could do this the standard way, as you remember from your high school civics class on how a law is written. But they had already missed the deadline for new laws that year and it would take several years to get the law through the legislature and into effect, and the NWU could just roadblock them again and again, and if the engineers found out what the recruiters were planning, it’d stir up a hornet’s nest.

So the recruiters took the second option: fast track. If the authors make concessions to their opponents so those opponents accept the bill, then it goes for a quick vote and straight to the governor’s desk, where it is signed within 30 days.

So… if the recruiters wanted their law, they needed the NWU’s signoff.

Remember: the original law gave everyone overtime pay. The recruiters wanted a new law to exempt Silicon Valley so that computer workers got no overtime pay. We tech writers wanted overtime, so the recruiter’s law couldn’t affect the tech writers. So we added our clause to their law: our exemption from recruiter’s exemption.

Some of you may ask, but why didn’t the NWU just roadblock the whole thing? Like, can’t a few tech writers easily stop a ten-billion dollar industry?

Well, the recruiters and the employer’s associations have a lobby office in Washington, with paid staff. They had a number of attorneys on this issue. They make lavish campaign contributions. They were spending quite a bit of money to get this law, since they could lose hundreds of millions of dollars in annual billing.

Against the recruiter’s lobby was the NWU, a small union of technical writers. I am the chair for the tech writer trade group, an unpaid position. We all had our day jobs. We ran our entire campaign by email. Our expenses were several self-paid carpool trips to Sacramento and a few sandwiches.

The large unions (the AFL-CIO and the UAW) and the California Labor Federation (the association of unions) warned us that the recruiters would win.

Our best strategy was to compromise with the recruiters: if they gave us an exemption to their law, we would sign off on their law. The recruiters could fast-track it, get it signed, and get their own law, now named SB88 (Senate Bill 88,) sponsored by Senator Sher (D.) (See? If the recruiters get a Democrat to sponsor an employer’s bill, it would be more likely to pass. So forget any notions about Democrats and Republicans as automatically pro- or anti-worker.)

We wrote our clause to be added to their law. Here it is (quoted from SB88):

> (5) “The employee is a writer engaged in writing material, including box labels, product descriptions, documentation, promotional material, setup and installation instructions, and other similar written information, either for print or for onscreen media or who writes or provides content material intended to be read by customers, subscribers, or visitors to computer-related media such as the World Wide Web or CD-ROMs.”

This means that if you write documentation, manuals, marketing material, or similar content, and you write for print, CD-ROM, or the web, then you are entitled to overtime pay.

We tech writers know that computer technologies and media are changing constantly, so we wanted the clause to cover the future, incl. e-books, Palm Pilots, and “other technologies not yet invented.” So through a series of emails with core NWU people, each of whom has over a decade of experience in tech writing and the computer industry, we worked out our clause and included the words “content,” “onscreen media,” and “computer-related media” to cover the future. The definition is loose enough to cover editors, journalists, and other groups involved in the production of “content” (the new name for written material.)

I’m also active in SFWoW and WebGrrls, the two major lists for women in technology for Silicon Valley. Many women from both of these lists sent emails to Sacramento in support. I know many of these women personally and I know their working conditions. So we added web content creators in our clause.

We also have friends who work in other computer fields where long hours and low pay are standard: people in tech support, QA (quality assurance,) sysadmins, production, assembly, and so on, plus many of the dotcom workers in San Francisco. The recruiters wanted to strip overtime pay away from all of these workers. They wanted to allow overtime only under $20/hr. We argued that no one can live here on $20/hr and this should be higher. Many women who work on the web are earning $20 or $25/hr and that is not enough. So we demanded that the limit be raised to $41/hr. If you are a W2-contractor in the computer industry in California and you earn less than $41/hr, you get now overtime, regardless of your job function.

The STC (Society for Technical Communications) was also active. The STC is a large association for technical writers. However, the STC also includes recruiters, whose strong influence keeps the STC from acting in the writer’s behalf. So a number of key people within the STC, who agreed with the NWU’s goals, helped us in several ways.

We also got the support of a number of recruiting companies as well. These agencies did not agree with the recruiter lobby and saw no reason why workers should lose their overtime pay. Their support was extremely important in showing to the State Labor Commission that the recruiters’ association did not speak for all recruiters.

After a long negotiations throughout the summer, in which Tom Rankin of the California Labor Federation (the association of unions) acted on our behalf, the recruiters accepted the NWU exemptions into their law and we signed off on their law.

The recruiters accepted our exemptions because they were going after bigger fish: the engineers. The computer engineers who work as W-2 contractors are generally earning $100-300/hr and often work 60-80 hours per week. The recruiters were afraid that if such workers were entitled to overtime pay, the companies may cut overtime work, and therefore the recruiters would lose their 30-50% share of that money (this can be much as $6,000 per week to a recruiter for a single worker.)

Engineers have always refused to organize or even to be aware of their interests: they think recruiters are their friends. One engineer said to me: “Engineers think they’re so smart that no one could do such a thing to them. Wow. They got really screwed.” The law is an annual loss of as much as $50-75,000 dollars per each engineer. Yep, it’s legal. The recuiters wrote a law to take away their money. Silicon Valley engineers were plundered by their “friends”.

The law passed the Senate and went to Govenor Davis, who signed it Sept. 19th, 2004, and it went into effect immediately. If you’re an engineer, or you make over $41/hr, and you’re not covered by the NWU clause, the recruiters are stripping away your overtime pay.

Economic Impact

You can calculate the economic impact of this bill. But you’ll need a calculator with ten-digit display.

There are 330,000 computer industry workers in Santa Clara county alone. About a third are contractors. Easily 75% of those work as W-2 contractors through a recruiter. That’s about 80,000 employees. If they are working just an extra five hours per week, at an average of $50/hr, that comes out to $125 in overtime pay per person, ten million dollars per week for all of them, and for a whole year, that’s $500 million dollars. The AB60 law gave everyone overtime pay and the recruiters deleted most of this.

Those are very conservative numbers. First, we considered Santa Clara county alone. The law covers all technology workers in California.

Secondly, the law covers software engineers. They earn between $100 to $300 per hour. They usually work 60-70 hours per week. It’s not uncommon to work 80 hours per week. An average engineer at $125/hr and 65 hrs/week should earn $937 per week in overtime, or nearly $47,000. But the recruiter’s law deleted all of that.

Multiply that by 50,000 engineers. Here is where you’ll need the ten-digit calculator. It’s 2.3 billion dollars. Silicon Valley engineers alone will lose $2.3 billion due to this law. Now calculate this for all of California. That’s a mess of money.

Now let’s look at a woman who is working at a San Francisco dotcom. She is working at $20/hr and 60 hours per week. Her overtime pay comes out to an extra $200 per week, or $10,000 per year. That amount will let her buy a car, pay her rent, or make a down payment on an apartment. Multiply this by the 20,000 dotcom workers.

What if she is earning $40/hr? Her overtime pay will be $20,000/year. It’s a substantial raise.

This law has a major economic impact on Silicon Valley workers. For the engineers, it’s devastating. Each engineer lost $50,000 or more per year in income.

For the tech writers, the web content writers, and the under-$41/hr workers, it’s a huge raise.

And wait, there’s more. The law’s $41/hr limit includes an automatic cost-of-living increase, pegged to the inflation index, on October 1, every year. Since the law was signed in mid-September, the limit was increased a few weeks later in October.

You can use your own numbers and calculate this as you like, but in any case, the result is a huge number.

Summary

This is the most significant high-tech labor victory in Silicon Valley. The NWU is the only high-tech union in Silicon Valley, and compared to other unions, it’s a tiny union. Yet with close teamwork and computers, email, and our social networking, the NWU reached far beyond its membership to change the economic landscape for tens of thousands of computer industry workers.

  • If your overtime pay was taken away, now you know who took it. The recruiter association wrote a law and took it from you.
  • Don’t blame your individual recruiter, the ones who talk to you on the phone. They are just employees, doing their job. None of them had any influence on this issue, one way or the other. The ones who wrote the law and took your money are the CEOs of the large recruiting firms and their lobby, the NACCB.
  • If you’re covered by the NWU clause, you know where your overtime is coming from. The NWU is the National Writers Union: we are tech writers who understand our interests and work together to protect our interests. The recruiters tried to take our money away; we organized, worked within the legislative system, pushed back, and protected ourselves and our friends.
  • If you’ve ever wondered why you should join a union, well, this story explains it. The employer associations and the recruiter associations know very well where their interests are, and they are quite active in promoting those interests. However, their interests are not in your interests.
  • If your manager tells you that you can’t work more than 40 hours due to overtime, and you want to work the extra hours and give up your overtime, then tell your manager to switch you from W-2 IRS tax status to 1099 IRS tax status. This makes you an independent contractor and you are not affected by overtime. Thus you can work all the hours you like. This also means you’ll work without a recruiter who takes 30-40% of your money, so you’ll be paid more.
  • If you’re a manager and you don’t want to pay overtime, then hire your workers as 1099 workers. No overtime and no recruiter fees.
  • If your overtime pay was taken away from you, then go organize, young dude. Join your professional association, see where they stand on this issue, and organize. Contact the NWU and we’ll help you. This issue is not closed. We have plans for more on this.

And Finally, a Thank-you Note

We put together a broad coalition to win this issue. We appreciate the efforts of Tom Rankin of the California Labor Federation. We are very grateful for the help and cooperation of many different groups, incl. the STC and the recruiters who stood up to the NACCB. Those who send us emails with your stories helped us to argue for overtime pay for you and your co-workers. Enjoy your overtime money! You earned it.

About the NWU

The NWU’s legislative strategy was led by Andreas Ramos (Tech Writer Trade Group Chair,) Alice Sunshine (former BITE organizer,) Jeffry Fawcett (BITE Co-Chair,) Dirk van Nouhuys, Mike Bradley, and Bruce Hartford (NWU Secretary-Treasurer.)

The National Writers Union (www.nwu.org, UAW Local 1981) represents more than 6,500 freelance writers including journalists, book authors, technical writers, business writers, web content creators, poets, academics, fiction writers, and cartoonists. It has sixteen locals across the nation, including three in California: San Francisco Bay Area, Santa Cruz/Monterey, and Greater Los Angeles.

For More Information

  • National Writers Union
    www.nwu.org
  • Andreas Ramos, Chair, NWU Tech Writer Trade Group