10 May 2018
Wells Fargo is on the hook for $97 million after a Los Angeles federal judge found that the bank committed violations of California’s labor laws, according to a Bloomberg report.
The San Francisco-based bank plans to appeal the ruling.
The judge found that Wells Fargo’s California home mortgage consultants and private mortgage bankers did not get the breaks they were entitled to. Wells Fargo had argued that it owed $25 million to its employees for the violations.
However, it ballooned to $97 million after the judge sided with the bankers and consultants who argued that not only their hourly pay but also their commissions should be used as basis to determine the money they were entitled to.
The award stems from a 2017 lawsuit filed by a Los Angeles mortgage broker against the bank over allegations of California wage and hour labor violations. US District Judge Percy Anderson allowed the broker’s claim that the bank failed to provide rest breaks and another claim for unfair competition, while throwing out the rest.
Anderson in January sided with the broker and held Wells Fargo liable for the violation. The judgment applies to California mortgage bankers and consultants who worked for the bank between March 17, 2013, and Aug. 1, 2017.
“Wells Fargo’s compensation structure for its home mortgage consultants complies with California’s wage and hour laws, including pay for all break periods, and allows our HMCs to earn competitive, performance-based compensation,” Wells Fargo spokesman Tom Goyda said. “We plan to appeal on the basis that the court’s decision reflects both a misunderstanding of our HMC compensation plan and a misapplication of the relevant state law.”
The judgment follows a string of scandals for the embattled bank. It recently agreed to pay $480 million to settle a class-action lawsuit related to its fake-account scandal. Wells Fargo has also confirmed that it may be facing a $1 billion penalty for charging mortgage borrowers improper fees and charging other customers for unneeded car insurance.
Source of article: https://www.mpamag.com/news/wells-fargo-ordered-to-pay-97mn-for-calif–labor-law-violations-100318.aspx