Zenefits will pay $3.4M in unpaid overtime to 743 employees | Hacker News Reader

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

techcrunch.com

118 pointsjanober94 comments

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!"

It's not about accidental miscalculation, it's about intentionally classifying employees in dubious/illegal ways to cut down on their benefits.

they are aiming for zero benefits

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/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."

That's a mistake that I would hope an HR systems business would be able to avoid when it comes to their own employees...

And if the HR outsourcing company that is based in CA doesn't know about that regulation, how is a mom-and-pop shop expected to know about it?

"You had one job..." </meme>

If you write software in CA, the threshold is actually ~$88k[2] as of Jan 1, 2017 (the threshold is updated annually in accordance with a consumer price index).

[1] See section 515.5, https://leginfo.legislature.ca.gov/faces/codes_displayText.x...

[2] https://www.dir.ca.gov/oprl/ComputerSoftware.pdf

Does this mean if one were to make less, overtime has to be paid, even if the work is voluntary? Thinking of employees at early stage startups

Yep. Caveats apply and consult a lawyer who knows the labor code, but yep.

Tell that to the school districts.

Teachers make way more then $42k in California. Teachers make over $80,000 on average and even get overtime pay. Now I think teachers should make this amount but just saying they are above this.

Here is a school picked at random. http://transparentcalifornia.com/salaries/2014/school-distri...

The shoemaker's children go barefoot.

This is a true adage - my grandfather was a mechanic (of sorts) his cars always had an "oh, yeah, it just does that sometimes"

Son of a plumber. Our bathrooms and toilets always had issues.

And how many programmers here have gotten used to the bugs in the software they use every day?

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..."

"Son of a bad plumber?" :)

Just one with bad plumbing.

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.

I fix shitty code all day then go home and write my own shitty code so doesn't make sense to programmers??

Honestly, when I get home I try to avoid the computer as much as possible. It's why I enjoy playing video games on consoles instead of a PC because I don't have to continue doing what I've already done for 8 hours that day (sit close to a monitor, use mouse/keyboard, etc).

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.

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.

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).

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.

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.

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.

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.

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.

> 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?

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.

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.

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

What part of only paying employees after being forced to by law enforcement is "proactive"?

At least they didn't wait for the "employees" to file a lawsuit like Google did: http://www.crainsnewyork.com/article/20150412/SMALLBIZ/15041...

Oh you're right. That's what I get for badly skimming the article. Thanks, I take back my comment.

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

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.

> I think it's more concerning that it's probably just incompetence

Greed is more likely.

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.

Systemic features built into the American political and legal systems. Corporations before Humans every time.

so which "cultures" do you think this applies to? BTW this is a realy racist POV you have here.

I'm pretty sure that the comment above was referring to corporate cultures that condone sloppy practices, and there was no racism implied.

Any relationship to race with regards to "culture" you're reading in there strikes me as inferred, not implied.

There is a pretty decent argument that American corporate culture is very happy to screw workers, defend people who screw workers, and commiserate with those who get caught screwing workers.

Perception is every thing ask a BME person about their interactions with the police

You are conflating the larger definition of the term "culture" with a specific, narrower one and it's not making the point you think it's making.

Eh, it's a Pavlovian instinct. See the word "culture" in any context, shout "Racism!"

If it doesn't make sense, and people point this out, just double down and shout the same thing but louder.

Yawn.

I agree with him in many contexts that there is a profoundly racist tilt to American culture, and there is a profoundly racist tilt to "tech" culture as well.

But that's not what was being referred to here, no.

Calm down.

A company - in this case, Zenefits - will have its own distinct culture. This is what's being referred to ... not "businesses overall" (although there can be a lot of similarities) ... and certainly nothing at all to do with something like societal culture, much less the culture of a specific demographic or race.

Honestly, the word culture in this context has nothing to do with race.

It's just so easy to be a little unfair to employees, that it's probably harder to be fair – you have to pay more attention. And since employees have no bargaining power against companies, there's not much they can do to push back.

This is what unions are for.

At least for the Bay Area, employees have a plethora of companies they can migrate to if they aren't being treated right.

Depends on how well they're paid. For example it's unlikely I'm going to just walk across the street and into a position that pays as well as my current one does.

I mean, I could probably get any $100k + "equity" gig on AngelList, but I don't feel like taking a ~50% (rough numbers here, it's less than 50%) pay cut. And I know I'm not even close to the only one in my pay bracket.

True, but pay isn't the only thing to take into account. Work-life balance, training opportunities, having to be on-call or not and being compensated if so, and promotional opportunities that can get you into a higher bracket with the former benefits included, and being somewhere where you feel stable are non-pay-related worth considering. Once you reach the point where you can "afford" the Bay Area, Quality of Life becomes pretty important IMHO.

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

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.

Are most offices not alcohol-free?

In SF? Zenefits wasn't alone in crazy alcohol shenanigans. Most offices have a decently stocked supply of alcohol.

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.

It's something that started as a sign that "we're cool and edgy and different", and gradually become a cultural shibboleth for startup people.

Having worked at dry offices, offices that had alcohol available at all times, and ones that did weekly TGIFs or whatever, I can't say I favor the trend. Invariably, it becomes a problem, and then people start moaning about how the culture is changing because the alcohol is disappearing. It's also alienating for a lot of otherwise good people (some people are alcoholics!)

It's a workplace, not a frat house. If you need a drink, finish your work, and go out and enjoy your life. But then, I feel the same way about office meals (I'd prefer you just paid me a higher salary, and I'll buy my own food, thanks), so I'm not a "team player".

It's a reflection of the workplace as an extension of the frat house environment that many workers at these places cherished. So if you enjoyed that kind of college environment (recall that the average age of such places tend to be very young), then such a company will feel natural.

Yes, I believe that there's an element of implicit bias to it. It's one of those murky things that gets bundled up with "culture fit" as spurious reasons to reject candidates who don't look and act like you do. Hence the "shibboleth" comment.

It's a complicated question. What's innocent, non-coercive fun for a small group of responsible people can get wildly out of control with one bad hire. And we don't do interviews for "angry drunk"....

> It's a workplace, not a frat house. If you need a drink, finish your work, and go out and enjoy your life.

They're not mutually exclusive. My office has alcohol, but people only tend to drink around or after 5, and typically quietly at their desk while working on something. Occasionally there will be a few people having a conversation in the kitchen over beers in the late afternoon.

I wouldn't describe it as a frat house though, and I think if you need to use that to describe an office, that's your problem; the alcohol is just a symptom.

I'd be okay with removing the alcohol if my employer also stopped driving me to drink[1].

[1]: https://www.stilldrinking.org/programming-sucks

Yeah, like I said...I've worked in offices that started with "we're all reasonable adults" policies. That's fine until it isn't anymore, and then it's a big, sad outrage and an excuse to complain about the "culture dying" when the rules change.

I'm not a teetotaler, but it just seems unnecessary to me. Start with a culture of "we drink at the bar", and it never has to be a problem for anyone in the first place. Alcohol doesn't make you better at your job, so there's really no argument for it, other than "culture", which goes back to the shibboleth thing....

The ultra puritanical attitude in parts of the USA is also a culture - and if you know your history it has a sectarian nativist basis against immigrants.

A dry workplace isn't "ultra puritanical", and implying that immigrants somehow need alcohol in the workplace is hilariously crude.

I was referring the attitude in the USA in general due to the early ultra protestant settlers, and if you look at the history of nativist anti immigrant movements it was aimed at European often poor catholic immigrants who came for areas with a well established brewing and wine traditions.

Yes, I know what you were referring to. But there's a huge logical gap between "established brewing and wine traditions" and "must have alcohol at work".

The prohibition movement was at least partially anti-immigrant. But saying "drink on your own time" is neither prohibitionist, nor anti-immigrant.

can only imagine this works well in large cities with good public transport. car-oriented commuter areas... doesn't even strike me as a remotely good idea.

> If you need a drink

...get treatment for your alcoholism.

If you merely want a drink, then...

> finish your work, and go out and enjoy your life.

I think it started as "cool and edgy" thing but showed many benefits to startups.

First, if you have many people you can buy alcohol in bulk much cheaper than usual, if most of your workforce enjoys it then it is cheaper to buy it for everyone than giving increasing salaries a bit for people to drink on the streets which can be expensive. This is especially true for a very young workforce which spends a lot in entertainment.

Second, in startups which are pushing people to work for long periods of time, it can be a way to disguise burnout. If you are spending all day in the office you can feel your social life suffering, but they bring your social life to the office, I have my own anecdotal evidence of this.

Third, to a smaller degree, people will stick around and while they are not exactly on call it can pop up solutions to problems or new ideas to the office, I've seen many TGIFs crazy ideas get implemented and generate a better work environment, it can feel like a much safer meeting space for people to speak up.

The attraction is building social glue. Does it work? It's really mixed; i've seen it work very well for bonding with new coworkers; i've also seen people alienated because they don't drink (for a variety of reasons).

These policies also make so much more sense with small offices where everyone knows each other.

Finally, there are typically stringent "on call" policies for people in control of deployed infrastructure to ensure they don't drink. People further away from the money don't need this as much.

Thanks for the reply, specifically in relation to people in control of deploying infrastructure abiding by different policies.

The bit about acting as social glue makes some sense to me, although to be honest it still seems somewhat problematic. Even discounting people who don't drink for whatever reason(alcohol dependance, religious views, health, etc) I would think that alcohol would pose just as many potential problems as it would aim to fix.

I'm obviously bringing a huge amount of personal bias to this discussion, but I'm probably exactly the kind of person who might benefit from the social aspects of drinking. I'm normally very shy and reserved, a beer or two often helps me relax and enjoy the company of others without my normal anxiety. Of course, a few too many beers results in me being too talkative and boisterous. In a social situation amongst friends, this would be no problem, someone would just tell me to calm the fuck down, I'd be momentarily embarrassed, and no one would think anything of it. At work however, it may pose more longer lasting problems with how others view me, or how I think others view me.

Again, I'm not judging anyone else who enjoys this kind of workplace, and I understand that what holds true for me may not be true of others, I just wanted to give my two cents.

Having free alcohol around is fine; you don't see much day drinking (social decorum works well here), and it means people tend to stick around a little on fridays to chat instead of taking off immediately. Some employees, anyway.

However, there are other cultures where it's a huge smell for, umm, fratty culture. Don't ignore your gut on this unless you like cleaning up your boss's puke and feeling a stigma for staying dry. I've also experienced this and it was really fun for a small startup where everyone is friends—it needs to be carefully managed as you grow; you lose employees this way.

Alcohol isn't for the workday. But people will sometimes linger and just talk. We'll do informal tech talks about what we're working on some Friday afternoons. Show a movie in a conference room every couple months. People will often have a beer in these settings.

Nobody is drinking while grinding out code, but these end-of-the-workday social environments can be incredibly valuable both socially and professionally.

It essentially replaces the team going to a bar together, and keeps that environment in the office.

I personally hate it. The in-crowd is the group that stays late for drinks a few times a week. Anyone who doesn't partake has less influence.

But you spark up one marijuana cigarette on the patio and everyone loses their shit...

Alcohol is rampant in offices throughout the bay area. Especially in smaller companies.

Drop "smaller". It is cleaner.

But you spark up one marijuana cigarette on the patio and everyone loses their minds.

Anecdotally, that's not accurate. The bay area companies with an outsized interest in drinking are typically pot friendly. Though with both, it's not cool to be intoxicated during real work.

Where?

To be honest I wish I could find a listing of alcohol free offices and offices that don't have a drinking culture. I can't drink and being dragged to the bar which usually has overpriced and or tasteless food is a real pain for the cost of socialization.

Ditto, I moved from startup-landia to Google about 2 years ago and have really enjoyed the decreased focus on alcohol.

Alcohol isn't banned, but the company in general does not pay for booze in the office outside of company events, so there aren't fridges or kegerators free-flowing with booze, unlike most of the startups I've worked at before.

Some teams keep celebratory stashes that they pay for themselves, which IMO strikes a good balance between letting people drink but discouraging a heavily alcohol-focused work culture.

I didn't find startup drinking culture tiresome until I left it, and I'm glad I did.

I really liked the drinking culture in my early to mid 20's but by my late 20's I got a stomach condition that put an end to that. Now I am in my early 30's I have lost any inclination to even want to partake. There are many things I now enjoy more being sober.

I've never been more productive and my mind has never been so clear.

I miss it now(mid 20's I guess), I used to work at a company with a big drinking culture and I made a big social circle around that, then I moved to a different country where I don't know anyone outside the office and the lack of this type of activities make it much harder for me to socialize, I feel very lonely sometimes.

I totally get this. I have many non-drinking coworkers and I always see a little pain in their eyes when the team suggests we go out and grab drinks.

Do you ever speak up for them? Does anyone?

That sounds dismal, regularly seeing a little pain in the eyes of your coworkers.

Replying to my own comment : I'm gonna make a ask hn post tomorrow about this.

Do it. Drinking culture in tech is incredibly rampant...

It's pretty trivial to land yourself in a position where no one invites you out for drinks. Once you arrive in that place, no one invites you anywhere. Then you age out, and nothing ever happens again, and you continue your treadmill of employment until death.

Welcome to this world.

Seriously, is that a thing? Not drinking in the office is an aberration in California? Because I'm in Ontario and if I was drinking at the office I'd probably get sent home for the day and have a nice talking to on the next one.

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

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

They were likely on some kind of hourly + contingency contract.

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