$17 million at stake: Are real estate agents nonexempt?

The California Labor Commissioner is suing ZipRealty Inc., claiming the company owes unpaid wages to hundreds of real estate agents. The California Department of Industrial Relations alleges that Emeryville-based ZipRealty paid its real estate agents less than the minimum wage and failed to pay them overtime be­­tween May 2006 and August 2010.

The lawsuit is seeking minimum wages in excess of $7.5 million, overtime compensation in the amount of $1.25 million—plus damages and ­penalties of over $9 million.

The case began when four former ZipRealty agents from Bakersfield filed an administrative wage action against the company. A labor commissioner awarded the four agents $75,000. But ZipRealty appealed, arguing that its agents were exempt outside sales agents and that it did not have to pay them the minimum wage or overtime.

In September, Judge Stephen Schuett of Kern County Superior Court awarded the four agents $330,000 in damages for wage-and-hour violations, pay stub violations and interest. The judge ruled the agents nonexempt because they worked away from their offices less than 50% of the time.

The new lawsuit attempts to apply the same logic to hundreds of additional real estate agents working at ZipRealty.

Overtime Issues D

According to Labor Commissioner Julie Su, “This enforcement is im­­por­­tant not just for employees, but for hardworking employers who shouldn’t have to compete against lawbreakers.”