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KPMG Auditors Lose Overtime Claim Appeal

NEW YORK — Audit associates with KPMG LLP recently lost their appeal to revive their overtime pay class action lawsuit. The Second Circuit Court of Appeals affirmed the earlier, lower court ruling that KPMG had not misclassified the audit associates. Both courts determined the audit associates were exempt from overtime requirements and were not owed overtime wages under the Fair Labor Standards Act (FLSA).

Audit Associate Classification

In their 2011 lawsuit, the audit associates claimed they were misclassified as exempt employees, which resulted in considerable loss in overtime wages. The audit associates claim they not only regularly worked more than 40 hours each week; they also often worked as many as 80 hours a week. However, they never received overtime pay.

The audit associates at KPMG, a major accounting firm, are technically entry-level employees. As entry-level employees, the associates said their work was routine, did not require advanced education, and was closely supervised. They also claim that while KPMG may consider them to be accountants, their work was not similar to accountant work, and therefore not exempt.

Typically, closely supervised entry-level positions, like the audit associates, are nonexempt and entitled to overtime. But, in this case, the court found that the audit associates did, in fact, receive substantial specialized accounting training, perform accounting tasks, and could be automatically promoted to senior accounting positions after two years of employment. As a result, in December 2012, a District court judge found the audit associates were well-educated, well-compensated, and not entitled to overtime pay because the FLSA was not intended to apply to them.

Learned Professional Exemption

The FLSA and the majority of state labor laws provide exemptions to their minimum wage and overtime requirements for certain professions and positions. One of the common traits, and a prime reason behind all of the exemptions, is that the positions are historically well-paid and not frequently subject to unfair wage practices. This is particularly true, or at least believed to be true, for professional positions that require extensive or specialized training, like doctors, lawyers, and accountants. Individuals subject to the learned professional exemption must be paid at least $455 a week and must have primary responsibilities and decision making discretion associated with advanced knowledge in science or learning gained from extended training or study.

As the case with KPMG illustrates, it is not always clear whether a position satisfies the learned professional exemption, particularly with entry-level positions. If you believe your employer has misclassified your position as exempt and has denied you overtime pay, contact our experienced team of overtime pay lawyers today at (855) 754-2795 to discuss your rights. Or complete the Free Unpaid Overtime Case Review form and our knowledgeable legal team will evaluate your case. If we accept your case, we will represent you under our No Fee Promise. This means there are no legal fees or costs unless you receive a settlement.

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