//Wells Fargo loan officers granted class action in Calif. pay dispute

Wells Fargo loan officers granted class action in Calif. pay dispute

A lawsuit alleging Wells Fargo improperly compensated its California-based mortgage loan officers could have broader ramifications now that it has been granted class certification.

At issue in Kang v. Wells Fargo Bank is whether alleged clawbacks of hourly wages, vacation and separation pay from earned sales commissions violated state laws, according to an order filed Feb. 6 in U.S. District Court in California’s Northern District.

Wells Fargo headquarters

Bloomberg News

Wells Fargo would allegedly compensate its mortgage sales force through advances on their commissions at a rate of roughly $12 per hour, then “claw back” the hourly pay from commissions and vacation pay as they were earned, according to the court documents.

The plaintiff, James C. Kang, has alleged that the clawbacks are in violation of several state laws related to employee compensation, including overtime, minimum wage and vacation-pay requirements because they left affected members of the sales force unpaid “for tasks unrelated to sales which Wells Fargo requires them to do.” Members of the sales force also did “not actually receive their promised vacation pay” due to the clawbacks, Kang alleges.

“Wells Fargo’s compensation structure for its home mortgage consultants complies with California’s wage and hour laws, including paying for all time worked, and allows our HMCs to earn competitive, performance-based compensation,” Wells said in a statement emailed by spokesman Jim Hines.

The one caveat in the judge’s order granting class certification are exclusions for members of the sales force hired or rehired after Dec. 11, 2015. The bank implemented a mandatory arbitration provision for its sales force at that time.

The class otherwise includes all nonexempt employees of Wells Fargo who as of Oct. 27, 2013 were home mortgage consultants or private mortgage bankers. Junior HMCs and PMBs also are part of the class, according to the court filing.

The class certification also includes a subclass of people whose employment was terminated.


Bonnie Sinnock

Bonnie Sinnock

Bonnie Sinnock is the capital markets editor of National Mortgage News.