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Software company ordered to pay $3.4 million in unpaid overtime

| Jun 26, 2017 | Employee Rights |

New Jersey employees classified as exempt from minimum wage and overtime by their companies might be interested to learn that a major insurance software startup will pay $3.4 million in unpaid overtime to greater than 700 of their workers. The agreement to repay employees came after the Department of Labor found that some of the employees were wrongly classified as exempt.

The company, Zenefits, had been paying their employees a flat salary, regardless of the amount of overtime and training time they were receiving. Essentially, this could have meant that employees were earning less than minimum wage due to the amount of time they were at work. According to the VP of Communications for Zenefits, the company fully cooperated with the DOL, resulting in no fines, damages or penalties. Further, the company agreed to allow the DOL to track its practices to ensure proper payments under the Fair Labor Standards Act.

This is not the first problem that the company has faced. In fact, Zenefits brought on its third CEO in early 2017 just before laying off 45 percent of its workforce. Furthermore, the company was fined approximately $7 million due to license violations in California.

New Jersey residents have certain employment rights that protect them against unfair wage practices. If an employee determines that they are not making minimum wage after working more than 40 hours a week, they may have the grounds to recover unpaid income. An employment law attorney could review such a case to determine if an employee has been wrongly classified. The attorney could try negotiating with the employer or take the case to court.