IBM ends 20% premium pay
To mitigate the earnings losses from the premium pay cut, IBM will be making a one-time base pay adjustment for the affected employees.
By Suzanne Deffree, Managing Editor, News -- EDN, August 7, 2008
Some 3,500 employees at IBM’s Essex Junction, Vt, facility and its East Fishkill, NY, fab will face pay changes come January 1, 2009.
The company has confirmed with Electronic News that come the new year it will be eliminating a premium it currently pays certain chip division employees and will be enacting a base-pay change ranging from 0 to 10% for the impacted workers.
“We announced a change in compensation for employees who work a 12-hour manufacturing schedule, which we call an alternate work schedule, mostly from within the systems and technology group and to a lesser number of people IBM’s integrated supply chain unit,” Jeffrey Couture, an IBM spokesman based in Vermont, told Electronic News.
Couture explained the 12-hour manufacturing schedule as one that sees IBM employees work seven 12-hour days over a two week period. For example, an employee may work 48 hours one week, then 36 hours the next.
“We are eliminating a premium that is paid for working that schedule, which is equal to 20% of earnings for non-exempt employees and $120 a week for exempt employees. Most of the employees are non-exempt and were earning the 20%,” Couture said.
To mitigate any earnings losses from that, IBM will be making a one-time base pay adjustment for the affected employees.
“Depending on what job family you are in, the salary impact will either be 0, no impact, to up to a 10% reduction [after the base pay adjustment]. So the max reduction anyone will see is 10%, some may see less or none,” Couture said.
The employees who are affected mostly work in semiconductor manufacturing, according to the IBM representative, and include production operators, technicians, and managers.
“[The pay changes are] being done to reduce costs and improve competitiveness, and also to reflect pay practices of other companies in the IT industry. We did a survey of competitors and found that most of those who have this alternate type of work schedule don’t pay a premium and those who do only pay about half of what IBM does. We think with the cut and the adjustment to base pay that we will continue to maintain competitive pay,” Couture said.
IBM said the pay changes will not affect its recently announced $1.5 billion investment in its New York State operations.
“The new investment is about the future of our microelectronics business, but they are two different things. The New York investment is about long-term investment and strategy,” Couture said.
