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Farmers Agrees to Pay $1.5M in Back Wages to CSRs

Farmers Insurance will pay more than $1.5 million in overtime back wages to 3,459 employees for pre-shift work they performed but were never compensated for.

The U.S. Department of Labor says the Los Angeles-based carrier agreed to pay the back wages after an investigation by the department “that disclosed significant and systemic violations of the federal Fair Labor Standards Act’s (FLSA) overtime and record-keeping provisions.

The department says the violations took place at 11 customer-service call centers in Florida, Kansas, Michigan, Oklahoma, Oregon and Texas.

Department investigators found that the company did not account for time employees spent performing pre-shift work. Employees routinely performed an average of 30 minutes of unrecorded and uncompensated work, the department says.

The work consisted of turning on work stations, logging into the company phone system and initiating certain software applications necessary to begin their call-center duties, each week.

The pre-shift work was excluded from official time and payroll records, the department says, and the employees are owed time and one-half of their regular rates exceeding 40 hours.

The department says Farmers has agreed to pay back wages and maintain future compliance with the FLSA by properly recording and compensating all hours worked by employees.

“Failing to properly compensate employees for pre- or post-shift work is a violation of federal law,” says Secretary of Labor Hilda L. Solis in a statement. “The Labor Department is committed to ensuring that employers abide by the law so that workers are protected against exploitation and law-abiding employers are not placed at a competitive disadvantage.”

Under FLSA, covered employees are paid for pre-shift and post-shift job duties and for attending meetings. Employers must pay the federal minimum wage of $7.25 an hour and maintain accurate time and payroll records.

A request for comment from Farmers, a member of the Zurich Group of Companies, was not immediately returned.

Property Casualty 360

Written by lordsinsurancelog

July 7, 2011 at 6:14 pm

Posted in Insurance News