Insurance Provider Faces Penalties in California Overtime Law Case

Colton, CAEarlier this year a California service provider was called to the carpet for violating overtime pay laws and failing to maintain adequate payroll records involving employees at its 13 locations in the state.

According to a statement from the US Department of Labor (DOL 1/11/13), Premier Insurance Services sells a variety of insurance policies and products. An investigation determined that Premier sales agents were paid strictly on commission with no “draw” or base pay. According to the statement, not only did the affected employee’s wages fall below the minimum wage, Premier was also found to have violated overtime laws by not paying their employees extra pay for extra work beyond the standard 40-hour work week.

According to the unpaid overtime investigation, about 90 employees at 13 Premier locations throughout the state will be in line for back wages. Of the nearly $120,000 Premier has agreed to pay to settle the issue, $33,000 will represent various civil penalties associated with the indiscretion.

“Paying employees on a commission-only basis does not give employers a green light to dodge minimum wage and overtime pay requirements,” said Priscilla Green, director of the Labor Department’s West Covina office, in the statement.

California overtime law holds that employees who work more than 40 hours in any given work week or more than five concurrent days are owed overtime pay unless their job is duly classified as overtime exempt. While there are legitimate occasions and examples of job classifications that do not allow employees to collect overtime wages, many employers attempt to cut their costs by incorrectly classifying their employees as overtime exempt - or claiming that employees are, in effect, independent contractors.

Premier Insurance Services is based in Colton, and was mandated by the US Department of Labor to sign an agreement requiring the firm to implement a proper timekeeping system to facilitate the documentation of employee hours.

Of note is an overtime pay laws case from 2012 that found Speedlane Insurance Services, of Upland, to have committed similar overtime pay and wage-and-hour indiscretions. Speedlane was mandated by the US Department of Labor to repay about $200,000 in back wages to 96 employees. The statement by the DOL revealed that Speedlane is owned and operated by a close relative of Hakim Kabir, identified in the California overtime law statement as the owner of Premier Insurance Services.