Even as IBM Corp. reports record profits, thousands of its U.S. employees are staring at pay cuts. It's the result of IBM's response to a lawsuit in which the company was accused of illegally withholding overtime pay from some technical employees. IBM settled the case for $65 million in 2006 and has now decided that it needs to reclassify 7,600 technical-support workers as eligible for overtime. But their underlying salary -- the base pay they earn for their first 40 hours of work each week -- will be cut 15 percent to compensate. IBM spokesman Fred McNeese said the move would not save the company any money, because the affected employees generally should find that overtime pay makes up for the salary cut.
See "IBM's response to overtime lawsuit has some employees fretting and fuming over base-pay cut", Brian Bergstein, Minneapolis Star Tribune, January 22, 2008