Farmers Insurance Inc., a company that is based in Los Angeles, California, will be paying thousands of employees the money they were owed from overtime back wages. The overall amount totals to $1.52 million dollars. The insurer was in violation of the federal Fair Labor Standards Act.
As a result of an investigation, Farmers Insurance Inc. has agreed to pay 3,459 of its employees the overtime back wages that they are owed. The investigation was done by the U.S. Department of Labor’s Wage and Hour Division.
The insurer was found to be in violation of the federal Fair Labor Standards Act’s overtime and record-keeping provisions. This affected employees who worked in customer service call centers in Florida, Kansas, Michigan, Oklahoma, Oregon, and Texas.
The investigation involved interviews with employees and a close look at the insurer’s systems for timekeeping and payroll. This revealed that employees of Farmers Insurance who worked in its call centers were not being paid for an average of 30 minutes of work every week. Thirty minutes of work per week is approximately 2 hours of unpaid compensation per month.
The employees were spending that time doing work related tasks that were necessary to do before they could begin their jobs at the call centers. They were turning on work stations, initiating software applications, and logging in to the phone system of the company. Farmers Insurance only recorded work that was done after these tasks had been accomplished.
The Department of Labor decided that Farmers Insurance Inc. owes those employees quite a bit of back wages. The work the employees preformed before starting their shifts had been excluded from the official time sheets and payroll records, so they never received pay for that work.
As a result, Farmers Insurance Inc. will be paying the employees time and one-half of their regular rates for the hours that were worked that exceeded 40 hours per week. The insurance company is also required to properly record and compensate all hours worked by its employees from this point onward. They must maintain future compliance with the Fair Labor Standards Act.
This compensation will be coming to employees who worked in call centers between January 1, 2009, and May 10, 2010, in centers in Kansas, Oklahoma, Florida, and Michigan. Workers formerly employed in a specific call center in Kansas between January 1, 2009, and January 10, 2010, will also receive compensation. Those who worked between January 1, 2009, and February 1, 2010, in centers located in Austin, Texas, Grand Rapids, Michigan, Olathe, Kansas, and Hillsboro, Oregon will also be paid.
Image by Miran Rijavec on Flickr