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Audit Associates Gain Certification for Conditional Collective Action--in Employee Misclassification Lawsuit

January 10, 2012

In recent employee misclassification news that Howard Law attorney Vincent Howard has been watching, a national collection action lawsuit has been conditionally certified this week by a New York federal court--after thousands of entry-level audit employees accused KPMG LLP of violating federal labor laws by engaging in employee misclassification, and failed to compensate them for overtime hours.

According to the lawsuit, KPMG, the U.S. audit, tax and advisory services firm, allegedly misclassified the firm's nationwide audit associates as "exempt" and did not properly compensate them according to the overtime provisions of the Federal Labor Standards Act (FSLA) as well as New York Labor Law.

The audit associates reportedly worked beyond forty hours per week and received no overtime compensation--a violation of the FLSA, which mandates that covered employees receive a minimum wage of at least $7.25 per hour for all hours in a forty-hour workweek, with overtime compensation of one and one-half their standard rate for any time worked beyond forty hours.

KPMG reportedly claims that these audit associates rightly receive professional or administrator exemption classifications, or "white collar" exemptions, as our Anaheim employment attorney blog has previously discussed, and are exempt from the FLSA's overtime payment and minimum wage provisions.

According to the FLSA, a professional exemption is applied when the employee's main work responsibilities include a precise and advanced knowledge in an area of science and learning, which is acquired by specific instruction, and is intellectual--requiring independent judgment. An administrative exemption covers employees whose main responsibilities include the performance of non-manual or office work that is directly linked to the operations or management of the employer's business--with the main duty of using independent judgment on specific issues involving the business of the company.

The lawsuit claims that the audit associates should not be classified with either an administrative or professional exemption, and as a result KPMG engaged in employee misclassification--because the associates perform regular level tasks that do not require independent discretion and instead require many levels of supervision and direction.

This New York federal court certification allows the audit associates across the country to unite and move forward with their employee misclassification overtime claims, which will thus far join associates from New York, New Jersey, Florida, Washington, Texas and Nebraska.

As Vincent Howard has discussed in a previous Newport Beach, California employment lawyers blog, employee misclassification is an alarming trend in workplaces across the country, where employees are often misclassified as independent contractors, or exempt from overtime provisions of federal and state law. Employers can erroneously misclassify employees, but often times engage in employee misclassification to avoid providing important employee benefits and protections, like minimum wage and overtime payments, rest break and meal periods, workers' compensation, and family and medical leave, among other benefits. Employee misclassification also allows dishonest employers to get out of paying payroll taxes and provides an unfair advantage over honest business competitors who honor federal and state labor laws.

Vincent Howard at Howard Law, PC represents employees who have experienced employee misclassification in the workplace, in Orange County and cities throughout Southern California. To discuss your wage and hour rights, contact Howard Law, PC, for a free consultation about your employee classification.

KPMG Audit Employees Win Conditional Collective Action Certification, The Sacramento Bee, January 4, 2012

KPMG Court Certification Order, January 3, 2012

Related Web Resources:

U.S. Department of Labor: Wage and Hour Division (WHD), Fair Labor Standards Act (FLSA)

Department of Labor (DOL): Wage and Hour Division (WHD)

Related Blog Posts:

Colorado joins DOL in Partnership to Cut Down Illegal Employee Misclassification, California Employment Lawyers Blog, December 9, 2011

EMPA of 2011 Aims to Stop Employee Misclassification, Invigorate National Economy, California Employment Lawyers Blog, October 26, 2011

California Representative Lynn Woosley Re-introduces Employee Misclassification Prevention Act, California Employment Lawyers Blog, October 24, 2011

CA Governor Jerry Brown Approves Bill to Increase Willful Employee Misclassification Penalties, California Employment Lawyers Blog, October 21, 2011

DOL and IRS Combine Forces to Combat Employee Misclassification, California Employment Lawyers Blog, September 26, 2011

New Act to Combat Employee Misclassification and Payroll Fraud, California Employment Lawyers Blog, May 4, 2011

Senator Harkin Introduces Payroll Fraud Prevention Act in Congress, California Employment Lawyers Blog, April 28, 2011

NY Governor Signs Employee Misclassification Act into Law, California Employment Lawyers Blog, October 29, 2010

New State Legislation Holds Employers Accountable for Employee Misclassification, California Employment Lawyers Blog, October 25, 2010

Missouri Falls Behind Other U.S. States in Identifying Employee Misclassification, California Employment Lawyers Blog, October 13, 2010

Senator Harkin Aims to "Level the Playing Field" to Protect Workers And Businesses from Employee Misclassification, California Employment Lawyers Blog, June 23, 2010