As Wells Fargo CEO John G. Stumpf was being grilled with questions and criticisms by the U.S. House Financial Services Committee in Wash. D.C., Thursday, a top-to-bottom review of cases, complaints and violations over the bank's employment practices is under way at the U.S. Department of Labor.
The review was triggered by a Sept. 22nd letter signed by seven U.S. Senators who asked the DOL to launch an investigation into whether Wells Fargo violated the Fair Labor Standards Act with respect to its account executives, bank tellers, branch managers and customer service representatives.
The alleged FLSA violations surfaced during investigations by the CFPB and California regulators uncovered that 5,300 employees opened as many at 1.5 million unauthorized deposit accounts and submitted more than 560,000 fraudulent credit card applications. California and federal regulators fined Wells Fargo a combined $185 million for the widespread illegal practices.
The fraud also exposed a Wells Fargo workplace characterized by stringent sales quotas and aggressive incentives imposed on its employees that opened the door for them to pursue underhanded sales practices.
According to the Senators' letter to the DOL, when quotas weren't met employees faced threats of termination, mandated hours of unpaid overtime, harassment and other forms of retaliation.
“Wells Fargo stands out given allegations that the bank repeatedly violated wage and hour provisions in the FLSA by denying employees overtime pay for hours worked in excess of 40 hours a week,” wrote the Senators. “These complaints go back as far as 1999 and cut across many of the different business group within Wells Faro, including the insurance, mortgage and retail banking groups.”
The letter cites seven specific examples of Wells Fargo account executives, branch managers, bank tellers, loan officers and technical support workers who filed lawsuits or complaints alleging unpaid overtime, wrongful terminations and wrongful misclassifications.
“The emerging portrait of the company's actual behavior suggests potential widespread exploitations of its own workforce in order to facilitate the widespread exploitation of its customer base,” wrote the Senators.
The letter was signed by Senators Elizabeth Warren of Massachusetts, Jack Reed of Rhode Island, Bernard Sanders of Vermont, Kirsten Gillibrand of New York, Sherrod Brown of Ohio, Robert Menendez of New Jersey, Jeffrey A. Merkley of Oregon and Mazie K. Hirono of Hawaii.
In a Sept. 26th reply letter to the Senators, Secretary of Labor Thomas E. Perez wrote that to ensure a thorough and expedient review of Well Fargos' alleged FSLA violations, the DOL has established a working group that includes the Wage and Hour Division, the Employee Benefits Security Administration, the Occupational Safety and Health Administration, the Office of Federal Contract Compliance Programs and the Office of the Solicitor.
Perez did not indicate when the Wells Fargo review would be completed.
In addition to the DOL's top-to-bottom review, it has taken other measure to ensure that all current and former Wells Fargo employees are aware of the worker protection laws, which includes a new dedicated landing page at www.dol.gov/wellsfargo. The federal agency also has set up toll free hotline, 1-866-4USADOL and email address [email protected].
Wells Fargo did not respond to a CU Times request seeking comment Thursday.
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