In January 2018, District Judge Percy Anderson agreed with the broker that the bank was liable for the California wage and hour violation. According to Bloomberg (May 9, 2018) the judgment covers mortgage bankers and consultants in California who worked for Wells Fargo from March 17, 2013, to August 1, 2017.
This decision could have far-reaching ramifications for many California workers paid with a commission-based salary. Sales jobs in real estate, computing and technology systems, and automobiles are typically paid by commission-based salary.
Meal and Rest Break Rights for Commissioned Employees
Under the California Labor Code, the California Court of Appeal in March, 2017 held that employers who pay employees solely on a commission basis must separately compensate them for time they spend on their rest breaks (Vaquero v. Stoneledge Furniture LLC). Rest periods, like other types of “nonproductive” time, do not contribute to the employee’s commission earnings. So, employers are required to separately compensate employees for that time to comply with California’s minimum wage and break laws.
Wells Fargo to Pay $97M to Workers on Commission
This ruling is one of many that the San Francisco bank faces. Also this month, Wells Fargo announced that it will pay a $480 million settlement to a group of shareholders who accused the bank of making “certain misstatements and omissions” in the company’s disclosures about its sales practices. In 2016, the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the city and county of Los Angeles fined the bank $150 million for over 5,000 of the bank’s former employees opening up to two million fake accounts in order to get sales bonuses, according to Courthouse News Services.
“We are pleased to reach this agreement in principle and believe that moving to put this case behind us is in the best interest of our team members, customers, investors and other stakeholders,” Wells Fargo CEO Tim Sloan said in a statement. “We are making strong progress in our work to rebuild trust, and this represents another step forward.”
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Interestingly, Wells Fargo has placed two full-page advertisements in the NYT last two Sunday editions, including an article titled “Wells Fargo raising its minimum hourly pay rate”. Perhaps it is banking on dispelling previous negative publicity, such as California labor lawsuits.