When companies hire new employees who require training before they can start working, it’s common practice for the employer to pay their new workers for that training time. It’s a considerable investment of time and resources on the part of the employer, but it ultimately benefits them because their workers will then be able to do their jobs efficiently and in accordance with the policies and procedures of the employer.
According to a recent wage and hour lawsuit against AXA Advisors LLC, the insurance and investment broker allegedly violated the federal Fair Labor Standards Act (FLSA) and New York Labor Law by failing to pay prospective associates minimum wage and overtime when they were in training.
The lawsuit alleges AXA recruited people to work as financial product marketers who had not yet received their license from the National Association of Securities Dealers or the Financial Industry Regulatory Authority. AXA’s employees were then allegedly required to pay for their own training and registration fees.
Bennet M., one of the plaintiffs, alleges he and other employees in training were paid only in commissions. According to the complaint, Bennet and other prospective associates regularly worked more than 40 hours a week and as much as 60 hours a week making cold calls to customers. If someone expressed interest in purchasing AXA’s financial products, prospective associates were allegedly required to transfer the call to a senior broker and were paid only if the call resulted in a sale.
The FLSA does allow employers to pay their workers on commission, but only if the total amount they’re paid, divided by the number of hours they worked, equals out to the federal minimum wage, which is currently set at $7.25 per hour. Far from that being the case, Steve K., who worked for AXA for three years, said he was allegedly not paid for the first few months he worked for the company because he allegedly did not make sales quotas.
Because of the extra training and skills required to do the job, financial product marketers might qualify for the overtime exemption provided by the FLSA, but not while they’re still in training and have yet to be licensed. In that time period they should have been paid one and one-half times their normal hourly rate for all the overtime they worked, in addition to receiving straight time for their first 40 hours of work per week. When workers are paid on commission, their employer can calculate their overtime rate by dividing the commissions they received by the number of hours they worked to determine their straight time and overtime rates.
Once they attained their license, the employees were allegedly paid an annual salary in addition to a commission on sales.
A New York federal judge divided the plaintiffs into a class action of employees who worked for AXA as licensed traditional pre-employment prospective associates in New York between May 2005 and October 2011 and a collective action of those who worked anywhere in the country any time in the four years leading up to October 2011. A class action automatically includes all the eligible plaintiffs in the class. A collective action requires plaintiffs to opt into the lawsuit.
AXA and the plaintiffs have agreed to settle the dispute for $2.3 million, of which almost $1.3 million will go to cover attorneys’ fees and costs for the plaintiffs’ counsel. After that, each member of the class action will receive $7,500 and each member of the collective action will receive $1,250.
The Chicago class action and employment law attorneys at the Chicago Overtime Law Center have three decades of experience fighting to help employees who are victims of wage, overtime and tip theft by their employers. We have a team of Chicago unpaid overtime lawyers who concentrate on prosecuting state and nationwide class action lawsuits. Our attorneys work out of Chicago and Oak Brook offices and pursue claims for workers all over the Chicago area including Schaumburg and Elgin. We protect unpaid workers who haven’t received overtime throughout the Chicago area including in DuPage, Kendall, Lake, McHenry, Kane and Cook Counties.
Our Downers Grove and Lombard overtime and employment lawyers are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Many employers mis-classify employees as being exempt from overtime laws and pay workers salaries instead of hourly wages in order to avoid paying them overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and a lawsuit may be the only way to recover their earned wages.
The Chicago Overtime Law Center is based in Chicago and Oak Brook, and represents clients throughout the country who have unpaid overtime and other employment right claims.