WHD News Release: [11/27/2012]
Contact Name: Deanne Amaden or Jose A. Carnevali
Phone Number: (415) 625-2630 or x2631
Release Number: 12-2278-SAN
San Francisco-based bank pays more than $1 million in overtime back wages to employees in 5 states following US Labor Department investigation
First Republic Bank misclassified 392 workers as exempt from overtime pay
SAN FRANCISCO The U.S. Department of Labor has recovered $1,009,643.93 in overtime back wages for 392 First Republic Bank employees in California, Connecticut, Massachusetts, New York and Oregon. An investigation by the department's Wage and Hour Division found that the San Francisco-based bank wrongly classified the employees as exempt from overtime, resulting in violations of the Fair Labor Standards Act's overtime and record-keeping provisions.
Investigators found that First Republic Bank failed to consider the FLSA's criteria that allow certain administrative and professional employees to be exempt from receiving overtime pay. In fact, the employees were entitled to overtime compensation at one and one-half times their regular rates for hours worked over 40 in a week. Additionally, the bank failed to include bonus payments in nonexempt employees' regular rates of pay when computing overtime compensation, in violation of the act. Record-keeping violations resulted from the employer's failure to record the number of hours worked by the misclassified employees.
"It is essential that employers take the time to carefully assess the FLSA classification of their workforce," said Secretary of Labor Hilda L. Solis. "As this investigation demonstrates, improper classification results in improper wages and causes workers real economic harm."
First Republic Bank is a full-service bank and wealth management company with approximately 1,700 employees in the five states. The bank has paid the back wages in full.
The FLSA provides an exemption from both minimum wage and overtime pay requirements for individuals employed in bona fide executive, administrative, professional and outside sales positions, as well as certain computer employees. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. Job titles do not determine exempt status. In order for an exemption to apply, an employee's specific job duties and salary must meet all the requirements of the department's regulations.
The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 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 visit http://www.dol.gov/whd/.