BofA Settles Calif. Wage and Hour Class Action For $36M

Bank of America’s appraisal subsidiary agreed to pay $36 million to settle a California wage and hour class action lawsuit, which alleges the bank misclassified current and former appraisers as exempt from overtime when they should have been eligible.

The wage and hour class action lawsuit, filed in federal court in April 2013, involves 365 current and former employees working as residential real estate appraisers for Bank of America’s subsidiary Landsafe Appraisal Services.

In the past, most employers treated appraisers as either exempt employees or independent contractors. In 2009, the federal appeals court in New York found that JPMorgan Chase should have been treating its mortgage underwriters as nonexempt employees.

That ruling suggested that other mortgage-industry employees working on transactions, such as appraisers, should also be nonexempt. Some companies chose to reclassify appraisers while Bank of America did not, prompting the overtime class action lawsuit.

BofA Employee Misclassification Leads To Unpaid Overtime

Using its in-house overtime rules, Bank of America violated state and federal laws by misclassifying employees and by failing to pay overtime compensation, according to the Bank of America overtime lawsuit.

The California overtime lawsuit states that employees often worked 16-hour days, but received no overtime compensation from Bank of America or Landsafe Appraisal Services.

According to the plaintiffs, the bank erroneously applied administrative and professional exemptions to the residential staff appraisers–a job that requires no special academic degree, just a state license. The misclassifications kept them from being paid overtime, the appraisers claims.

One of the named plaintiffs who worked for Landsafe until 2012 said she worked from 6 a.m. until 10 p.m. and rarely had time for lunch or breaks because of “artificially short deadlines set by Bank of America,” according to a statement by the firm representing the employee Class.

Rather than go to trial, Bank of America agreed to a wage and hour settlement of $36 million to resolve all claims. The bank has also agreed to reclassify its in-house staff appraisers as nonexempt employees if a planned sale of Landsafe to CoreLogic doesn’t go through, the motion says.

After attorney fees and expenses, the employees will receive an average of $60,000 to $65,000 each, making it one of the largest wage and hour settlements on a per-worker basis,

Wage and Hour Lawsuits

Misclassification of employees is at the heart of many wage and hour lawsuits in California. If they believe it’s to their advantage, some employers violate the California Labor Code and the federal Fair Labor Standards Act by incorrectly classifying workers as independent contractors, or as hourly, exempt, non-exempt or managerial, depending on which status cuts labor costs the most.

If your employer has prioritized profits over fair treatment of employees, then you may be entitled to compensation through a wage and hour lawsuit.

The Bank of America Unpaid Overtime Class Action Lawsuit is Boyd, et al., v. Bank of America Corp., et al., Case No. 8:13-cv-00561-DOC-JPR in the U.S. District Court for the Central District of California.

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