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Wage and Hour Division (WHD)

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Press Releases

U.S. Department of Labor
Wage and Hour Division
Release Number: 12-2416-SAN (SF-2)

Date: 

Jan. 10, 2012

Contact: 

Deanne Amaden or Jose A. Carnevali

Phone: 

415-625-2630 or 415-625-2631

Premier Insurance Services to pay $120,000 in back wages, damages, penalties following US Labor Department investigation


Commission-only pay practice failed to yield minimum wage or include overtime

WEST COVINA, CA -- Premier Insurance Services has agreed to pay a total of $119,570 in minimum wage and overtime back wages, liquidated damages and civil money penalties following an investigation by the U.S. Department of Labor’s Wage and Hour Division. The investigation determined that the insurer willfully violated minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act.

Investigators found that the commission-only pay practice used by the Colton-based employer at all of its locations resulted in employees being paid below the federal minimum wage and failing to receive an overtime premium for hours worked beyond 40 per week. The employer also failed to maintain employee time records.

“Paying employees on a commission-only basis does not give employers a green light to dodge minimum wage and overtime pay requirements,” said Priscilla Garcia, director of the West Covina District Office. “Premier Insurance Services knowingly violated the most basic labor laws to make a profit at the expense of their employees. This case should put other employers on notice that if they fail to pay their employees in compliance with federal law, our department will not hesitate to investigate. Employers may be found liable not only for back wages, but also for liquidated damages and other penalties.”

The department settled a related case last year after investigators discovered similar violations involving Upland, Calif.-based Speedlane Insurance Services. This company was owned and operated by a close relative of Hakim Kabir, owner of Premier Insurance Services. That investigation resulted in $200,000 in back wages due to 96 employees.

Premier Insurance Services will pay $43,297 in minimum wage and overtime back wages due to 90 employees and an equal amount in liquidated damages. The FLSA provides that employers who violate the law are, as a general rule, liable to employees for their back wages and an equal amount in liquidated damages. Liquidated damages are paid directly to the affected employees. Because of the willful nature of the violations, the employer will also pay $32,976 in civil money penalties.

To ensure future compliance, Premier Insurance Services has signed a settlement agreement with the Labor Department. The employer has implemented a timekeeping system to document employees’ hours worked, will assure payment of at least the federal minimum wage of $7.25 per hour and will accurately determine and pay overtime. The employer has branches in Bakersfield; Bellflower/Long Beach; Colton; Delano; Fresno; Lancaster; Lodi; Montebello; Palmdale; Riverside; Sacramento; Santa Ana; and San Leandro.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also are required to maintain accurate time and payroll records.

For more information about the FLSA, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243) or its West Covina office at 626-966-0478. Information is also available at http://www.dol.gov/whd.

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U.S. Department of Labor releases are accessible on the Internet at www.dol.gov. The information in this news release will be made available in alternate format (large print, Braille, audio tape or disc) from the COAST office upon request. Please specify which news release when placing your request at (202) 693-7828 or TTY (202) 693-7755. The Labor Department is committed to providing America’s employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit www.dol.gov/compliance.