We can now count Bank of America as the latest company in a string to reach major settlements in claims of allegedly misclassifying employees as exempt from wage and hour laws. A federal magistrate judge recently approved a $2.25 million settlement against the financial giant.
Federal and California law require that employees who are covered by overtime laws receive premium pay, in the form of time-and-a-half, whenever their hours worked exceed 40 in a workweek. Only employees who are legitimately exempt from these laws do not have to be paid premium overtime. California law generally provides more benefits than does federal law.
The state of California’s Industrial Welfare Commission created “wage orders” to regulate employee wages. These orders define who is exempt from state overtime laws; they are enforced by the Department of Industrial Relations. Wage Order 4 dictates the terms of the administrative exemption to California’s overtime laws, which was at issue in the case against Bank of America.
Bank employee Zelma Brawner brought a class action suit against Bank of America in 2014, alleging violations of state overtime laws. She claimed that she and others had been improperly classified as administratively exempt so that the employer did not have to pay overtime.
Brawner worked as a “dedicated service director” for the bank. This meant that she acted as a personal representative to corporate customers. The heart of Wage Order 4 is the exercise of “discretion and independent judgment.” Many employees covered by Wage Order 4 are female.
Although the bank did not admit any liability to Brawner or other employees, it settled the class-action lawsuit. A magistrate judge in the United States District Court for the Northern District of California granted final approval of the settlement in January.
Here’s a breakdown of the settlement distribution:
- $1,626,000 to the class members;
- $562,000 to the plaintiffs’ attorneys;
- $30,000 as a Private Attorneys General Act penalty;
- $22,500 to the California Labor and Workforce Development Agency;
- $15,000 to Ms. Brawner;
- $10,537.04 for costs;
- $9,000 to the third-party claims administrator.
The class member distributions will be allocated by formula, taking into account salary, overtime hours, and workweeks. Contact Labor Law Office, APC today to speak with an experienced class action attorney in California.
Sacramento, CA 95821