ZipRealty Sued for $17M by CA Labor Commissioner for Wage and Hour Violations and Employee Misclassification

October 4, 2011

In recent California wage and hour news that our Carson labor and employment attorneys have been following, Julie Su, California's Labor Commissioner, filed a lawsuit last week against ZipRealty Inc., for over $17 million--seeking to recover back wages and overtime pay for hundreds of real estate agents who were allegedly unpaid throughout the state.

According to the California Department of Industrial Relations (DIR) which oversees the Labor Commissioner's Division of Labor Standards Enforcement, ZipRealty, a real estate brokerage company, violated California state law for over four years by failing to pay agent employees the state minimum wage, as well as premium overtime payment for any hours worked beyond forty in a workweek.

The minimum wage laws in California were first established in 1937, and under California employment law, employers are required to pay state employees the minimum wage of $8 per hour. Under California law, nonexempt employees are also required to receive one and one-half times the employee's regular pay rate for any time worked over eight hours in a workday, and forty hours in a week of work. For hours worked beyond twelve in a workday, employees are required to receive double the employee's regular rate pay.

The California wage and hour lawsuit seeks over $7.5 million in minimum wages, $1.25 million in overtime compensation back pay, and over $9 million in damages and penalties. Labor Commissioner Julie Su stated that this wage and hour lawsuit surrounding real estate agents pinpoints a rapidly changing economy and labor market in the state--where wage and hour violations are affecting a wide variety of occupations and not just employees in the traditional low-wage occupations. Su stressed the importance of enforcing California's minimum wage laws--for employees, and for employers who play by the rules, who shouldn't have to compete against companies who gain an unfair competitive advantage by violating state labor laws.

This wage and hour lawsuit follows the court decision issued last month by Kern County Superior Court, after four ZipRealty agents filed wage claims in a Bakersfield office claiming that they often didn't receive any payment at all. During the Bakersfield trial, it was discovered that ZipRealty classified these employees as "outside salespersons" and therefore exempt from California minimum wages or overtime premiums. Judge Stephen Schuett ruled on September 1, that ZipRealty engaged in employee misclassification, and as the real estate agents worked less than fifty percent their work time away from the ZipRealty offices, they should have been classified as non-exempt employees.

The lawsuit filed last week by California Labor Commissioner Su, seeks to remedy the alleged statewide violations made by ZipRealty, by fighting to get back the employees' back wages to which they are legally entitled under California law. According to the Los Angeles Times, this is the largest minimum-wage enforcement action ever made by California Labor Commissioner Julie Su's department, the California Department of Industrial Relations' (DIR) Division of Labor Standards Enforcement.

In cities throughout Orange County, California and Southern California, contact Howard Law, PC today.

California Sues ZipRealty Over Minimum Wage, San Francisco Business Times, September 26, 2011

CA Labor Commissioner Files $17 Million Suit Against ZipRealty for Minimum Wages, PR Newswire, September 26, 2011

ZipRealty sued for nearly $18 million in minimum-wage case, Los Angeles Times, September 27, 2011

Related Web Resources:

California Department of Industrial Relations (DIR): The Division of Labor Standards Enforcement, (DSLE)

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

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

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

Renal Advantage Sued in Employee Misclassification Lawsuit, California Employment Lawyers Blog, September 6, 2011

T. J. Maxx Retail Chain Sued For Employee Misclassification, California Employment Lawyers Blog, August 25, 2011

Employee Misclassification Leads to Nearly $1M in Back Pay for 30 Restaurant Workers, California Employment Lawyers Blog, August 24, 2011

DOL Forces Texas Company to Pay $433K in Back Wages For Employee Misclassification , California Employment Lawyers Blog, August 5, 2011

CA Drug Sales Reps Sue Novo Nordisk in Class Action Wage and Hour Lawsuit, California Employment Lawyers Blog, July 28, 2011

Aon Corp. Settles Employee Misclassification Lawsuit for $10.5M , California Employment Lawyers Blog, July 8, 2011

"White Collar" Exemptions under the FLSA, California Employment Lawyers Blog, November 12, 2010

U.S. Labor Department Launches "We Can Help" Campaign to Enforce Wage and Hour Laws, California Employment Lawyers Blog, April 2, 2010

"Exempt" vs. "Non-exempt" in the California Workplace, California Employment Lawyers Blog, April 15, 2010