March 11, 2005 11:54 AM PST
Overtime coming to Electronic Arts
EA, publisher of the "Madden NFL" football game and a host of other popular video games, plans to make some employees eligible for overtime pay but not offer those workers bonuses or stock options.
The change, to begin next month, comes in the wake of employee lawsuits against EA and criticism about punishing hours in the game industry. It also marks a major shift from the Silicon Valley tradition of treating workers as professionals whose long hours are compensated in forms such as a stake in the company and annual bonuses.
HR, Electronic Arts
Company executive Rusty Rueff outlined the shift in a memo to North American employees Tuesday.
"The employment environment at EA was built to allow you flexibility as professionals, with the expectation that time on the job could be managed without watching the clock," Rueff said. "Unfortunately, labor laws have not kept pace with this spirit of entrepreneurialism, innovation and creativity. Also, recent lawsuits against EA, Sony and other California technology companies have led us to re-evaluate how we classify certain groups of workers."
EA has about 5,800 employees worldwide, with just less than half based in the United States.
The overtime pay move comes as employees in the software-publishing world overall have been working shorter hours in recent years, amid improved management and lower hopes for big stock windfalls. But the game industry is a younger field, and a study last year found that it is not uncommon for workers to put in 65 to 80 hours a week during project "crunches" that can last for months.
In response, EA acknowledged a problem and promised improvements. Company spokesman Jeff Brown on Thursday said an example of this is EA's decision to have seven project managers working on a team of 150 people as it makes a new game based on "The Godfather" movies.
A lawsuit filed against EA in July claims that the company improperly classified image production employees as exempt from California overtime laws. EA was hit with another lawsuit by an employee in February. The company said the shift to overtime pay eligibility will not affect jobs involved in class-action litigation, specifically artists and software engineers.
Brown suggested that California labor rules and demands from employees could push the company to move more of its work elsewhere, including a new studio it has launched in China. "There is a point where the cost of doing business in California gets so high that we have to look at these other studio locations," Brown said.