Wells Fargo to Pay $9M in Calif. Labor Laws Settlement

Wells Fargo has agreed to pay nearly $9 million to resolve claims that it violated California labor laws by failing to provide timely compensation to some workers.

The $8.95 million settlement will resolve a case brought by Wells Fargo mortgage consultants and private mortgage bankers alleging that they were forced to cover work-related expenses and were denied timely commission payments, as laid out in their contracts.

Wells Fargo has not admitted wrongdoing, but has agreed to settle the case. The plaintiffs recently filed a motion for preliminary approval, saying that the settlement is fair and reasonable.

Some 2,100 affected Wells Fargo employees will receive compensation from a $5.8 million fund. Approximately $3 million of the remaining funds will be used for Class attorney fees, and the lead plaintiff will receive a $15,000 incentive award.

“This represents a substantial recovery on the class claims, including full reimbursement on the expenses incurred by the class for marketing tools that gave rise to the central claim for damages in this action,” the approval motion argues.

The motion also notes that Wells Fargo has made internal changes since the filing of the labor laws complaint.

“In sum, with approval of the settlement and Wells Fargo’s reforms, plaintiff and his counsel will have achieved substantial remedies for the workplace issues that prompted the filing of this class action,” the plaintiff argues.

The Wells Fargo Labor Class Action Lawsuit is Case No. 3:15-cv-05239 in the U.S. District Court for the Northern District of California.

California Labor Laws

California’s strict labor laws have helped pioneer employee protections around the country. The Golden State provides workers some of the most favorable regulations for overtime and other employee benefits.

For example, overtime in California is paid at time-and-a-half for all hours worked over 40 hours in a week – similar to other states. However, overtime is also paid for all hours worked over 8 hours in a day and for the first 8 hours worked on the seventh consecutive day of work in a workweek. California labor laws also provide “double time” – double the regular rate of pay for all hours worked over 12 hours in a day and over 8 hours on the seventh consecutive day of work in a workweek. These rules apply for all eligible employees, although exceptions do apply.

In 2020, California’s laws are set to become even stricter. According to The Los Angeles Times, new labor laws are changing the way businesses can classify independent contractors in the state, something that could result in more workers being classified as employees. Other laws could limit companies’ ability to compel arbitration in employee disputes.

“California leads the way on labor standards and we’re not going to let employers do end runs around those standards,” said California Labor Secretary Julie Su. “We want to support businesses who look at their role in a holistic and humane sense.”

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