CHICAGO — A former brokerage advisor trainee is suing Wells Fargo for violating federal minimum wage laws. Erika Williams’ wage claim is in reaction to Wells Fargo’s demanding she pay the company for her training. Williams’ lawsuit claims paying for training costs violates the Fair Labor Standards Act (FLSA) because the trainees will effectively earn neither minimum wage nor overtime. Williams’ lawsuit is also seeking class action certification because charging former trainees for training costs is a practice in the company and the industry.
Wells Fargo, like the majority of financial institutions, has training programs for its incoming brokerage advisors. These training programs span many years and can be costly, particularly if the trainee leaves before the program is completed. Wells Fargo’s training program lasts five years and costs the company $55,000 per trainee.
The company wants Williams to pay $50,000 in training costs because she left the program early. Williams left the program after the first year when she failed to meet training standards. She received an annual salary of $45,000 during her time in the program. Williams will have earned a negative $5,000 if she is forced to pay her training costs. Interestingly, the amount a trainee would owe the company decreases the longer the trainee is in the program.
Brokerage trainees are required to sign agreements to stay with a firm, unless fired, until the end of training. Since the industry has about a 20-30% success rate in its training programs these agreements are important in disputes like this. Williams failed to meets the company’s standards, which is grounds for termination. However, she claims Wells Fargo regularly sues for training costs even when employees were terminated for failing to meet standards. Trainees must also agree to arbitrate disputes over training costs, so Williams may be denied class action certification and she may have to arbitrate her claim.
Employers are required to pay employees at least minimum wage for time spent working, in meetings, and in required training. Brokerage advisor trainees presumably receive on-the-job training that benefits both themselves and their employer. Since the trainees are both working and training, their employer should be required to follow state and federal minimum wage and overtime laws. Even though Williams received an annual salary, unless she is an “exempt” employee, she should be entitled to minimum wage and overtime pay for the hours she was working and training.
If you are a current or former brokerage advisor trainee and believe you have been denied proper wages and overtime, contact our experienced team of overtime pay lawyers today at (855) 754-2795 to discuss your situation. Or complete the Free Unpaid Overtime Case Review form on the top right of this page 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.