San Francisco software service company enters compliance agreement affecting 743 workers in Arizona, California
Employer: Zenefits FTW Insurance Services
Site: 303 2nd St. San Francisco, California
Two closed offices in Tempe and Scottsdale, Arizona
Investigation findings: U.S. Department of Labor Wage and Hour Division investigators found that Zenefits violated the Fair Labor Standards Act by misclassifying 743 account executives and sales development representatives in San Francisco, and in Tempe and Scottsdale, Arizona, as exempt from minimum wage and overtime. The company incorrectly paid the workers a flat salary for all hours worked, regardless of overtime or training time.
Resolution: Zenefits will pay $3.4 million in unpaid overtime to 743 account executives and sales representatives in California and Arizona. The software company has also entered into an enhanced compliance agreement that includes monitoring by the department to prevent future wage and hour violations.
Quote: “We have put money back in workers’ wallets while also working with Zenefits to ensure future compliance with federal labor law,” said Ruben Rosalez, the Wage and Hour Division’s regional administrator in San Francisco. “This case allows us to level the playing field for all of the employers who play by the rules. We are dedicated to protecting both workers and employers.”
Background: Zenefits provides products and services, including software for payroll, timekeeping, hiring and employee benefits. The company also serves as an insurance broker.
Information: For more information about federal wage laws administered by division, call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.