California State Labor Commissioner Julie A. Su announced last week that a settlement of nearly $5 million has been reached in a statewide lawsuit filed to recover unpaid minimum wages for real estate agents working for a California company.

The California Department of Industrial Relations (DIR) first became involved in this case in 2010 when four realty agents in Bakersfield filed wage claims against ZipRealty, alleging that the company did not pay minimum wages and overtime wages to the agents.

ZipRealty appealed the initial wage claim award to the four agents, and lost the appeal in a Superior Court. The company then settled the claims for $595,000. The Division of Labor Standards enforcement (DLSE) decided later to expand its legal efforts to attempt to recover unpaid wages and overtime for all agents in California employed by the company. Part of the DIR, the DLSE adjudicates wage claims, investigates discrimination and public works complaints and enforces state labor law.

The case led Commissioner Su to issue the following strong warning to employers: “Employers considering appealing Labor Commissioner awards should keep [this] case in mind. If our agency determines that violations go beyond the claims before us, we can and will pursue those cases for all affected employees. We learned of [this company’s] systemic minimum wage violations during the litigation of these cases in Superior Court.”

With this recent settlement, the company will have paid out a total of $5,595,000. Employers should be aware that the DIR is ramping up its enforcement efforts to protect workers in the current economy. 

“Enforcement of the minimum wage is critical to maintaining a floor that allows workers to survive. Employers need to do the right thing and obey the law. Those employers that don’t should be prepared to pay twice the amount of wages owed, penalties, interest, and attorney’s fees. It pays to follow the law,” Commissioner Su said in a statement.

California laws governing wages and wage payments can cause confusion for employers and HR professionals. In addition, state and federal law sometimes conflict, making it difficult for California employers to know which law to follow.​​​​​​​ Employers can avoid the California law confusion by subscriping to our HR That Works. 

Author: Gail Cecchettini Whaley

HR Watchdog, HRCalifornia’s Employment Law Blog, © California Chamber of Commerce