Reuters reports that two-thousand unlicensed junior accountants from PricewaterhouseCoopers recently brought a class action lawsuit against the company alleging that they were not paid for overtime pay required under state law. Under California law, companies must pay overtime wages to employees who work over 40 hours in a week, unless those workers meet certain exemptions. Such exemptions include those for professionals, executives and administrators.
Though sources didn't mention any issues regarding misclassification of the accountants, employers often misclassify employees in accounting for their wages, leading to discrepancies in their wages. Employee misclassification is more common than one would think in the business world, as the laws governing the classification process can be difficult to understand. And of course, some employers deliberately misclassify employees in order to avoid paying overtime wages.
On Wednesday, the 9th U.S. Circuit Court of Appeals ruled that unlicensed accounts at the company are not automatically protected by California law regarding overtime wages. That ruling reversed a lower court ruling which determined that the accountants were not exempted from overtime wage requirements.
In the district court's decision, the judge determined that the plaintiffs, as unlicensed accountants, were not eligible to be exempted under the professional exemption, and that PricewaterhouseCoopers failed to show that they qualified for the administrative exemption.
After the appeals court decision, PricewaterhouseCoopers may now proceed with litigation on the issue of whether the unlicensed accountants may be exempted from California overtime laws. The company's case, if it proceeds, will go back to the original district court in Sacramento to rule on that issue.