Wage Disputes: Banks Among Biggest Settlement Payers
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What is the main topic discussed in this episode?
Your Money Briefing.
Money and market stories from The Wall Street Journal.
What are the biggest recent headlines about job openings, IMF forecasts and Social Security?
I'm J.R. Whalen in New York. Banks and financial companies account for a substantial amount of settlements and fines paid out in lawsuits alleging workplace compensation discrepancies. We'll run the numbers in a moment. First, these money headlines. The Labor Department says for the first time since such record-keeping began in 2000, the The number of available positions exceeded the number of Americans without jobs and actively looking. U.S. job openings rose to a seasonally adjusted 6.7 million at the end of April. That's also a record high. And it was more than the 6.3 million Americans who were unemployed during the month. In April, there were 1.3 million openings in broad business services sector, which includes everything from accountants and software developers to temporary staffers and clerical workers.
Healthcare and social assistance followed closely behind with 1.1 million unfilled jobs. An International Monetary Fund study has turned up a peculiar cause of recessions.
How prevalent are wage-dispute settlements among banks and financial firms?
That's good economic forecasts. IMF argues that positive forecasts led the public and private sector to celebrate by borrowing more, which encourages the sort of debt accumulation that builds frailties in the economic system, harming growth. The IMF, by the way, has also missed most recessions in its forecasts, predicting only 24% of recessions worldwide. one year ahead of the event. And the Social Security program's cost will exceed its income this year for the first time since 1982, forcing the program to dip into its nearly $3 trillion trust fund to cover benefits. The annual report by the trustees of Social Security and Medicare released on Tuesday said that by 2034, those reserves will be depleted and Social Security will no longer be able to send its full scheduled benefits.
This is your Money Briefing from The Wall Street Journal. Welcome back, everybody. Since 2000, banks and insurance companies have paid some of the largest settlements in lawsuits stemming from alleged inadequate worker compensation. And Wall Street Journal workplace reporter Lauren Weber joins us to discuss. So, Lauren, lawsuits that allege wage discrepancies are filed with a range of accusations.
That's right. These are often called wage theft cases, which is a term that makes it sound like employers are literally stealing their pay from workers. It's not quite as clear cut as that. But what it means is that workers are alleging that they're not being paid for all the time that they're working. So it might be a situation where managers ask people to clock out. but then ask them to do some cleaning up tasks or other work-related jobs.
What kinds of wage-dispute allegations do workers typically bring?
And then in a lot of cases, it's workers being asked to work overtime, but either not being compensated for that, even if they are eligible for overtime, or managers classifying their workers as exempt from overtime pay and workers questioning that classification and bringing a lawsuit based on it.
And financial services companies were among the most that paid settlements over the past 18 years or so.
Yeah, we looked at a report from an organization that compiled class action lawsuits, class action settlements and penalties over the last 18 years. And they found that six of the top 12 payers in these kinds of wage theft cases were banks and financial services companies. One of the examples was Bank of America, which in 2013 paid $73 million to settle allegations from some retail branch and call center employees that the bank didn't pay them for overtime. JP Morgan was the subject of a $42 million settlement in 2011. Wells Fargo had a case that settled earlier this year for $27.5 million. And they're currently fighting another case where a judge ordered them to pay about $97 million.
And Walmart tops the list, having paid out more than a billion dollars in fines and settlements. But there's a little more to the story than that.
Which major banks have paid large overtime and wage-settlement payouts?
Yeah, well, that includes a lot of lawsuits that were consolidated. One was a 2008 payment for about $352 million from workers that alleged that they were asked to do business.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:00–0:06
2
What are the biggest recent headlines about job openings, IMF forecasts and Social Security?
0:06–1:03
3
How prevalent are wage-dispute settlements among banks and financial firms?
1:03–2:36
4
What kinds of wage-dispute allegations do workers typically bring?
2:36–3:46
5
Which major banks have paid large overtime and wage-settlement payouts?
3:46–4:39
6
Why do higher-paid financial employees also file wage claims, not just hourly workers?
4:39–6:06
7
How do employers defend against overtime and wage claims amid legal gray areas?
6:06–6:54
Speakers
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