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Morgan Stanley Allegedly Violated the Fair Labor Standards Act By Failing to Pay Financial Advisor Associates Overtime

Even trainees are entitled to minimum wage and overtime under the federal Fair Labor Standards Act (FLSA), in addition to various state laws. Under the FLSA, all hourly employees are entitled to earn at least the federal minimum wage of $7.25 per hour for all hours they spend working. For all time spent working after eight hours a day or forty hours a week, employees are entitled to one and one half times their normal hourly rate.

According to a recent wage and hour class action lawsuit, Morgan Stanley violated the federal FLSA and various state laws by failing to pay its Financial Advisor Associates (FAAs) the proper overtime compensation when they worked more than forty hours a week. Jason Z., who filed the class action lawsuit, worked for the company as an FAA in 2012. He alleges he regularly worked more than forty hours a week during his six-month training period and was not properly compensated for that time.

The lawsuit, which was filed in California, also alleges that Morgan Stanley failed to provide its employees with meal and rest breaks as mandated by California labor law. Under the law, all hourly employees in the state of California are entitled to a paid rest break lasting at least ten minutes for every four hours they spend working. For every five hours spent working, the employees are entitled to an unpaid meal break lasting at least thirty minutes. For every day an employee does not take one of these meal breaks, for any reason, the employer is required to pay her one hour’s worth of wages, in addition to all wages earned that day.

Financial advisor associates working for Morgan Stanley are also subject to having business expenses deducted from their wages. According to the recent wage and hour lawsuit, these deductions allegedly included the salary for financial assistants and errors in transactions with clients. The lawsuit alleges these deductions were made in violation of various state and federal wage laws.

Under the federal FLSA, employers are allowed to make certain deductions from an employee’s pay, including taxes and health insurance. However, the Act makes no mention of allowing employers to deduct the salaries of other workers from an employee’s paycheck.

The FLSA also requires employers to provide its hourly workers with full, accurate, itemized wage statements that detail exactly how many hours the employees worked, their hourly rates, and all deductions made from the employees’ pay. These wage statements are meant to serve as records for the employees, so they know how many hours they worked and what they were paid in any given pay period. Failure to provide accurate wage statements can be used against an employer to prove any violations of wage and hour laws were made willfully and intentionally.

The wage and hour lawsuit is seeking to represent all current and former FAAs who worked for Morgan Stanley. It is asking for $5 million to compensate employees for lost wages and overtime, as well as attorneys’ fees and costs. Morgan Stanley denies all of the claims.The attorneys at Chicago Overtime Law Center have decades of experience litigating wage and hour cases, including overtime, vacation pay, meal breaks, and tips. We have offices conveniently located in Oak Brook and Chicago, Illinois. Contact the  Berwyn and Chicago Heights overtime lawyers and attorneys at the Chicago Overtime Law Center today at 312-869-4095. We are looking to represent financial advisor associates, loan and mortgage brokers who have not been paid overtime and have been mis-classified as managers.