8 ms·

Zenefits will pay $3.4M in unpaid overtime to 743 employees

118 points by janober 9y ago

tomohawk 9y ago
If I work an hour, I should be paid for an hour. The whole salary thing creates a situation where employers are incentivized to get workers to work as many hours as possible because its free labor. If workers were paid for each hour of work regardless, it would force employers to properly account for the cost instead of shifting it to the employees.
- brianwawok 9y ago
  On the flip side.. it can be a nice arrangements for both sides. This week super super busy? Work 45 hours to help out. Next week slow? Take off Friday at 1 pm and work a shorter week. Such agreements can be good for both employeer and employee. The only real "problem" is if there starts to be abuse by either side. If 50 or 60h is the expectation for every week, then you should know that signing up. 60h week standard is "fair" from a salary POV, but make sure the salary is more than the 40h a week job down the road.
  - csomar 9y ago
    Think of the salary for an employee as the same as a retainer for a consultant. You are paid $x,xxx per month for your availability for xx hours per month. They can be all or none consumed. But more hours are not guaranteed (employees/consultants should be able to reject over time) and should be paid a different rate (higher).
  - Amezarak 9y ago
    There are very few companies, in my experience, that are OK with you charging less than 40 hours, regardless of circumstances. If you want to leave early, you burn your leave time. They are all happy (and in some it is implicitly mandatory) for you to work greater than 40 hours.
    - Consultant32452 9y ago
      My experience is that I just do something reasonable and I've never had any problems. If it's just an hour or so early I'm leaving on Friday I don't even bother to announce it. Sometimes I'll just state I had to deal with some issue in the middle of the night so I'm taking off early tomorrow to catch up on rest or whatever. Oh, and unless I'm taking an entire day off I've never used any leave time for something like a doctor's appointment at any employer. If I miss a few hours of work one day I might make a special effort to make it up or might not, depending on what's going on in the department and my perceived need of whether or not it's valuable to the team/project. I'm sure soon enough I'll get hit with some overtime for a big project or a late night support call anyways. FWIW I acknowledge that overtime is part of the deal on occasion working in IT, but I'm not the type to grind away 50 hours every week forever. I might be able to sustain that for a week or two in an emergency, but it's not worth it. I talk about that part of the work culture during the interview process. I would avoid grind shops.
    - brianwawok 9y ago
      I have not had that experience in reasonable environments. There ARE bosses that count butt in chair hours, but I choose to not work for them. They likely now have an entire team of people that clock exactly 40 hours, after all of the talent left.
  - jakebasile 9y ago
    Doesn't that same arrangement work out if you're paid hourly? 45 one week has 5 extra (actually 7.5) hours, so the next slow week you can elect to work only 32.5 hours and you're in exactly the same place income wise. This means the employer gets less simple hours work from you for the same amount of money, but that's the price of overtime.
- sunir 9y ago
  I don't want to be paid by the hour. I want to get paid by the return I generate. The idea of renting your life to someone else for sustenance is at an anthropological level odd, don't you think? Also from a capital point of view. Why work harder? In fact why not work easier if you are paid by clock hours.
  - sangnoir 9y ago
    > I want to get paid by the return I generate. Return to who - your employer or 'the market'? If your employer fails to monetize the widget you've just made, are you happy to get $0?
    - sunir 9y ago
      That's just allocation of risk to return. It can be negotiated and modelled in several ways; you're familiar with this: Some sales people make commissions. Some HR managers get salaries. Some engineers get salaries plus equity plus profit sharing. It's easier to move risk onto labour if they labour has more direct control over the return, which is why sales people are more comfortable with direct commissions than engineers. Because my consulting practice is based on operational improvements and not ownership of the end result, I don't work on a commission basis but on value-based pricing.
  - hasbroslasher 9y ago
    It is funny that people say "we should be paid hourly" but any job I've ever had with hourly pay I did as little as I possibly could. Possibly because I was a stoned teenager in food service. But even as a salaried employee, I don't often feel like I'm here because they need me every hour from 9 to 5 - I feel like I'm here because I can do some things and if I weren't here at all they'd be in trouble. Anyway, I was also a stoned teenager in food service when I got a job at a pizza shop delivering pies. No hourly pay, just $20 a day plus a $2/$5/$10 delivery fee depending on how far you were from the shop. I kept all the tips and payday was 11:30 or so every night. I've never worked harder or felt better about work than I did coming home with my pockets full of money at the end of the day - it was clear that my showing up and busting my ass made me my paycheck. Ironically, this is called "getting paid under the table" and it's illegal.
thelittlec 9y ago
Does anyone have any insight into working at Zenefits at the current moment? I'm about to interview with them for a data position.
- ben174 9y ago
  Just left there after a year. I had a great time and built some very fun stuff. Alcohol-free office is a bit of a bummer, but there's a nice little joint downstairs you can buy an overpriced beer.
  - tdb7893 9y ago
    Are most offices not alcohol-free?
    - phamilton 9y ago
      In SF? Zenefits wasn't alone in crazy alcohol shenanigans. Most offices have a decently stocked supply of alcohol.
      - Inconel 9y ago
        I work in aerospace and we have a ton of machinery around that can cause serious injuries so this kind of environment would never work here, but what's the attraction of a workplace that allows alcohol? Don't get me wrong, I like the occasional drink, and maybe I'm just a lightweight, but I imagine my work productivity/reliability would tank after even a few beers. Hell, I don't even drink coffee on work days, even though I quite enjoy the taste, because I feel like it makes me too jittery. Now I will admit that I'm a technician so I work with my hands but is coding/programming more immune to this kind of thing? Also, from my experience alcohol seems like one of the best guaranteed ways to get people to act in ways they normally wouldn't. I certainly act more relaxed, maybe even unprofessional or crude, after I've had a few drinks. Which is of course why I don't drink in a professional setting. After all the things I've read about toxic work environments at places like Uber, if I was running a company, the last thing I would want is my employees drinking at work. I want to make clear I've never worked in an environment that allowed drinking, certainly not one that had employee areas stocked with alcohol, so I'm not judging here, I'm just trying to figure out the attraction. And how companies that allow or support it mitigate the potential negative effects.
pasiaj 9y ago
The shoemaker's children go barefoot.
- Aloha 9y ago
  This is a true adage - my grandfather was a mechanic (of sorts) his cars always had an "oh, yeah, it just does that sometimes"
  - nojvek 9y ago
    Son of a plumber. Our bathrooms and toilets always had issues.
    - endominus 9y ago
      And how many programmers here have gotten used to the bugs in the software they use every day?
      - ryan-allen 9y ago
        Not just that, but how many regular users, too! "Oh, to make that work you have to click here and then click out and you can then start typing..."
    - teddyuk 9y ago
      "Son of a bad plumber?" :)
      - sleepychu 9y ago
        Just one with bad plumbing.
  - toomanybeersies 9y ago
    I've never heard GPs aphorism before, but I "never buy a car from a mechanic" quite often. In my experience, mechanics will either have a really nice car, or a real beater (or one of each, since the nice car is a project car). It makes sense really, if you spend all day fixing shitty cars, you're not going to want to go home and fix your car, and you're not going to want to pay someone over double your hourly pay rate to do it for you.
hoodoof 9y ago
It's probably not the message that a company selling payroll benefits is wanting to send to the market. "Oh sure you can trust us to calculate your employee benefits right, that our business!"
- jpatokal 9y ago
  It's not about accidental miscalculation, it's about intentionally classifying employees in dubious/illegal ways to cut down on their benefits.
  - awqrre 9y ago
    they are aiming for zero benefits
    - Neliquat 9y ago
      How zen.
- tarr11 9y ago
  Asking employers if employees are exempt or not is the likely cause. A common mistake employers make is assuming that if you are paid a salary, you are exempt. In truth, if your salary is below 47k in CA, you are not exempt and entitled to overtime. https://www.calchamber.com/california-employment-law/pages/exempt-nonexempt-employees.aspx https://www.calchamber.com/california-employment-law/pages/e... "Exempt employees in California generally must earn a minimum monthly salary of no less than two times the state minimum wage for full time employment. Paying an employee a salary does not make them exempt, nor does it change any requirements for compliance with wage and hour laws."
  - ajdlinux 9y ago
    That's a mistake that I would hope an HR systems business would be able to avoid when it comes to their own employees...
s73ver 9y ago
Why employers continue to insist upon stealing from their employees, I'll never know.
- hoodoof 9y ago
  I think it's more concerning that it's probably just incompetence. You can fire thieves and criminals, incompetence and lack of attention to detail is cultural.
  - camus2 9y ago
    > I think it's more concerning that it's probably just incompetence Greed is more likely.
  - s73ver 9y ago
    That's a pretty large amount of incompetence. Not saying it isn't possible to be that incompetent, but it's a bit of a stretch.
  - imnotlost 9y ago
    Systemic features built into the American political and legal systems. Corporations before Humans every time.
  - deleted 9y ago
    [deleted]
  - walshemj 9y ago
    so which "cultures" do you think this applies to? BTW this is a realy racist POV you have here.
    - greenyoda 9y ago
      I'm pretty sure that the comment above was referring to corporate cultures that condone sloppy practices, and there was no racism implied.
    - eropple 9y ago
nodesocket 9y ago
Overtime? Huh? Since when do high tech jobs that pay over 100K keep track of hours and have over time pay?
- SilasX 9y ago
  It's not the technical workers, though I am confused about why other exemptions wouldn't apply. From the article: >Insurance software startup Zenefits has agreed to pay $3.4 million in unpaid overtime to 743 of its account executives and sales representatives
  - hkmurakami 9y ago
    They were likely on some kind of hourly + contingency contract.
ksikka 9y ago
Not bad, at least they're being proactive about fixing the dubious decisions that were made at some point.
- callalex 9y ago
  What part of only paying employees after being forced to by law enforcement is "proactive"?
  - gogopuppygogo 9y ago
    At least they didn't wait for the "employees" to file a lawsuit like Google did: http://www.crainsnewyork.com/article/20150412/SMALLBIZ/150419974/is-that-on-demand-worker-actually-your-employee http://www.crainsnewyork.com/article/20150412/SMALLBIZ/15041...
  - ksikka 9y ago
    Oh you're right. That's what I get for badly skimming the article. Thanks, I take back my comment.
deleted 9y ago
[deleted]

118 points by janober 9y ago

If I work an hour, I should be paid for an hour. The whole salary thing creates a situation where employers are incentivized to get workers to work as many hours as possible because its free labor. If workers were paid for each hour of work regardless, it would force employers to properly account for the cost instead of shifting it to the employees.

brianwawok 9y ago
On the flip side.. it can be a nice arrangements for both sides. This week super super busy? Work 45 hours to help out. Next week slow? Take off Friday at 1 pm and work a shorter week. Such agreements can be good for both employeer and employee. The only real "problem" is if there starts to be abuse by either side. If 50 or 60h is the expectation for every week, then you should know that signing up. 60h week standard is "fair" from a salary POV, but make sure the salary is more than the 40h a week job down the road.
- csomar 9y ago
  Think of the salary for an employee as the same as a retainer for a consultant. You are paid $x,xxx per month for your availability for xx hours per month. They can be all or none consumed. But more hours are not guaranteed (employees/consultants should be able to reject over time) and should be paid a different rate (higher).
- Amezarak 9y ago
  There are very few companies, in my experience, that are OK with you charging less than 40 hours, regardless of circumstances. If you want to leave early, you burn your leave time. They are all happy (and in some it is implicitly mandatory) for you to work greater than 40 hours.
  - Consultant32452 9y ago
    My experience is that I just do something reasonable and I've never had any problems. If it's just an hour or so early I'm leaving on Friday I don't even bother to announce it. Sometimes I'll just state I had to deal with some issue in the middle of the night so I'm taking off early tomorrow to catch up on rest or whatever. Oh, and unless I'm taking an entire day off I've never used any leave time for something like a doctor's appointment at any employer. If I miss a few hours of work one day I might make a special effort to make it up or might not, depending on what's going on in the department and my perceived need of whether or not it's valuable to the team/project. I'm sure soon enough I'll get hit with some overtime for a big project or a late night support call anyways. FWIW I acknowledge that overtime is part of the deal on occasion working in IT, but I'm not the type to grind away 50 hours every week forever. I might be able to sustain that for a week or two in an emergency, but it's not worth it. I talk about that part of the work culture during the interview process. I would avoid grind shops.
  - brianwawok 9y ago
    I have not had that experience in reasonable environments. There ARE bosses that count butt in chair hours, but I choose to not work for them. They likely now have an entire team of people that clock exactly 40 hours, after all of the talent left.
- jakebasile 9y ago
  Doesn't that same arrangement work out if you're paid hourly? 45 one week has 5 extra (actually 7.5) hours, so the next slow week you can elect to work only 32.5 hours and you're in exactly the same place income wise. This means the employer gets less simple hours work from you for the same amount of money, but that's the price of overtime.
sunir 9y ago
I don't want to be paid by the hour. I want to get paid by the return I generate. The idea of renting your life to someone else for sustenance is at an anthropological level odd, don't you think? Also from a capital point of view. Why work harder? In fact why not work easier if you are paid by clock hours.
- sangnoir 9y ago
  > I want to get paid by the return I generate. Return to who - your employer or 'the market'? If your employer fails to monetize the widget you've just made, are you happy to get $0?
  - sunir 9y ago
    That's just allocation of risk to return. It can be negotiated and modelled in several ways; you're familiar with this: Some sales people make commissions. Some HR managers get salaries. Some engineers get salaries plus equity plus profit sharing. It's easier to move risk onto labour if they labour has more direct control over the return, which is why sales people are more comfortable with direct commissions than engineers. Because my consulting practice is based on operational improvements and not ownership of the end result, I don't work on a commission basis but on value-based pricing.
- hasbroslasher 9y ago
  It is funny that people say "we should be paid hourly" but any job I've ever had with hourly pay I did as little as I possibly could. Possibly because I was a stoned teenager in food service. But even as a salaried employee, I don't often feel like I'm here because they need me every hour from 9 to 5 - I feel like I'm here because I can do some things and if I weren't here at all they'd be in trouble. Anyway, I was also a stoned teenager in food service when I got a job at a pizza shop delivering pies. No hourly pay, just $20 a day plus a $2/$5/$10 delivery fee depending on how far you were from the shop. I kept all the tips and payday was 11:30 or so every night. I've never worked harder or felt better about work than I did coming home with my pockets full of money at the end of the day - it was clear that my showing up and busting my ass made me my paycheck. Ironically, this is called "getting paid under the table" and it's illegal.

thelittlec 9y ago

Does anyone have any insight into working at Zenefits at the current moment? I'm about to interview with them for a data position.

ben174 9y ago
Just left there after a year. I had a great time and built some very fun stuff. Alcohol-free office is a bit of a bummer, but there's a nice little joint downstairs you can buy an overpriced beer.
- tdb7893 9y ago
  Are most offices not alcohol-free?
  - phamilton 9y ago
    In SF? Zenefits wasn't alone in crazy alcohol shenanigans. Most offices have a decently stocked supply of alcohol.
    - Inconel 9y ago
      I work in aerospace and we have a ton of machinery around that can cause serious injuries so this kind of environment would never work here, but what's the attraction of a workplace that allows alcohol? Don't get me wrong, I like the occasional drink, and maybe I'm just a lightweight, but I imagine my work productivity/reliability would tank after even a few beers. Hell, I don't even drink coffee on work days, even though I quite enjoy the taste, because I feel like it makes me too jittery. Now I will admit that I'm a technician so I work with my hands but is coding/programming more immune to this kind of thing? Also, from my experience alcohol seems like one of the best guaranteed ways to get people to act in ways they normally wouldn't. I certainly act more relaxed, maybe even unprofessional or crude, after I've had a few drinks. Which is of course why I don't drink in a professional setting. After all the things I've read about toxic work environments at places like Uber, if I was running a company, the last thing I would want is my employees drinking at work. I want to make clear I've never worked in an environment that allowed drinking, certainly not one that had employee areas stocked with alcohol, so I'm not judging here, I'm just trying to figure out the attraction. And how companies that allow or support it mitigate the potential negative effects.

pasiaj 9y ago

The shoemaker's children go barefoot.

Aloha 9y ago
This is a true adage - my grandfather was a mechanic (of sorts) his cars always had an "oh, yeah, it just does that sometimes"
- nojvek 9y ago
  Son of a plumber. Our bathrooms and toilets always had issues.
  - endominus 9y ago
    And how many programmers here have gotten used to the bugs in the software they use every day?
    - ryan-allen 9y ago
      Not just that, but how many regular users, too! "Oh, to make that work you have to click here and then click out and you can then start typing..."
  - teddyuk 9y ago
    "Son of a bad plumber?" :)
    - sleepychu 9y ago
      Just one with bad plumbing.
- toomanybeersies 9y ago
  I've never heard GPs aphorism before, but I "never buy a car from a mechanic" quite often. In my experience, mechanics will either have a really nice car, or a real beater (or one of each, since the nice car is a project car). It makes sense really, if you spend all day fixing shitty cars, you're not going to want to go home and fix your car, and you're not going to want to pay someone over double your hourly pay rate to do it for you.

hoodoof 9y ago

It's probably not the message that a company selling payroll benefits is wanting to send to the market. "Oh sure you can trust us to calculate your employee benefits right, that our business!"

jpatokal 9y ago
It's not about accidental miscalculation, it's about intentionally classifying employees in dubious/illegal ways to cut down on their benefits.
- awqrre 9y ago
  they are aiming for zero benefits
  - Neliquat 9y ago
    How zen.
tarr11 9y ago
Asking employers if employees are exempt or not is the likely cause. A common mistake employers make is assuming that if you are paid a salary, you are exempt. In truth, if your salary is below 47k in CA, you are not exempt and entitled to overtime. https://www.calchamber.com/california-employment-law/pages/exempt-nonexempt-employees.aspx https://www.calchamber.com/california-employment-law/pages/e... "Exempt employees in California generally must earn a minimum monthly salary of no less than two times the state minimum wage for full time employment. Paying an employee a salary does not make them exempt, nor does it change any requirements for compliance with wage and hour laws."
- ajdlinux 9y ago
  That's a mistake that I would hope an HR systems business would be able to avoid when it comes to their own employees...

s73ver 9y ago

Why employers continue to insist upon stealing from their employees, I'll never know.

hoodoof 9y ago
I think it's more concerning that it's probably just incompetence. You can fire thieves and criminals, incompetence and lack of attention to detail is cultural.
- camus2 9y ago
  > I think it's more concerning that it's probably just incompetence Greed is more likely.
- s73ver 9y ago
  That's a pretty large amount of incompetence. Not saying it isn't possible to be that incompetent, but it's a bit of a stretch.
- imnotlost 9y ago
  Systemic features built into the American political and legal systems. Corporations before Humans every time.
- deleted 9y ago
  [deleted]
- walshemj 9y ago
  so which "cultures" do you think this applies to? BTW this is a realy racist POV you have here.
  - greenyoda 9y ago
    I'm pretty sure that the comment above was referring to corporate cultures that condone sloppy practices, and there was no racism implied.
  - eropple 9y ago

nodesocket 9y ago

Overtime? Huh? Since when do high tech jobs that pay over 100K keep track of hours and have over time pay?

SilasX 9y ago
It's not the technical workers, though I am confused about why other exemptions wouldn't apply. From the article: >Insurance software startup Zenefits has agreed to pay $3.4 million in unpaid overtime to 743 of its account executives and sales representatives
- hkmurakami 9y ago
  They were likely on some kind of hourly + contingency contract.

ksikka 9y ago

Not bad, at least they're being proactive about fixing the dubious decisions that were made at some point.

callalex 9y ago
What part of only paying employees after being forced to by law enforcement is "proactive"?
- gogopuppygogo 9y ago
  At least they didn't wait for the "employees" to file a lawsuit like Google did: http://www.crainsnewyork.com/article/20150412/SMALLBIZ/150419974/is-that-on-demand-worker-actually-your-employee http://www.crainsnewyork.com/article/20150412/SMALLBIZ/15041...
- ksikka 9y ago
  Oh you're right. That's what I get for badly skimming the article. Thanks, I take back my comment.

deleted 9y ago

[deleted]