Business Insider has learned that IT contractors are taking steps to end their employment with the largest outsourcing firms in the world.
The changes came as a result of a federal appeals court ruling that found that the firms discriminated against African-American workers who qualified for overtime.
That ruling, released Monday, said that when a contractor had to be paid overtime, it was typically for an entire day’s work.
That means that the majority of employees working for the contractors did not receive overtime pay at all.
While the ruling does not affect other employers that employ contractors, the changes are likely to increase pressure on those employers to do better.
The ruling could also make it easier for other employers to hire contractors and get rid of the practice.
The ruling, from the U.S. Court of Appeals for the D.C. Circuit, came in a lawsuit brought by the American Civil Liberties Union of Washington, D.CEU, and several other groups.
The suit claims that contractors discriminate against workers because they cannot meet the company’s wage requirements.
“When a contractor is forced to work 24 hours per day and to provide no overtime pay, it is the contractor’s job to pay its workers the full rate of pay for every hour of work that it does, regardless of whether it has overtime or not,” the court ruled.
“That is not discrimination, it’s fair labor practice.”
“The fact that this is a class action lawsuit means that no single plaintiff is necessarily entitled to relief,” the ACLU wrote.
“But the Court is aware that a class of contractors who have been paid a low hourly rate but are forced to do the same amount of work is likely to benefit from this ruling.”
In response to the ruling, the DCEU said it will ask the DCC to issue an order instructing the DSC to stop paying contractors for their overtime work.
“We will appeal to the Supreme Court of the United States,” DCEI President Jim Ritter said.
“And we will also fight this case vigorously.”
While many of the contractors who are losing their jobs will receive back pay for the time they worked, others are expected to get no pay at a time when the company is facing layoffs.
The Associated Press reported Monday that at least three contractors who had been hired to perform maintenance on the office building that houses the DFCs headquarters, which are also run by the contractor, are expected in court next week to argue that they were not paid overtime.