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HR services firm settles misclassification charges

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in Employment Law,Human Resources

Zenefits FTW Insurance Services, an HR management software service based in San Francisco, has settled charges it misclassified 743 account executives and sales people as exempt from minimum wage protections. Workers in both California and Arizona were affected.

A U.S. Department of Labor Wage and Hour Division investigation revealed that Zenefits paid the employees a flat weekly salary regardless of how many hours they worked.

The company has agreed to pay the workers $3.4 million in unpaid overtime. Additionally, Zenefits will enter into an enhanced compliance agreement that involves close monitoring by WHD.

Note: Efforts designed to circumvent overtime laws often backfire, resulting in years of government scrutiny. Employers should regularly review their employees’ duties and pay to ensure they comply with the Fair Labor Standards Act.

Have doubts about employee exempt/nonexempt classifications? Consult your attorney.

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