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ZipRealty sued for $17 million for alleged unpaid wages to employees

Unpaid wages to agents alleged

The California State Department of Industrial Relations today filed a $17 million lawsuit against California-based ZipRealty, alleging the brokerage has failed to properly compensate employees since 2006, according to the Oakland Tribune.

Three class action lawsuits already settled against ZipRealty, along with four Kern County agents’ complaints resulting in compensation of $330,000 awarded for past wages and penalties, the State Department is pursuing a new lawsuit to cover agents who had not joined the class action lawsuits or filed complaints with the state.

Court documents reveal that ZipRealty allegedly refused to pay agents overtime or for hours spent in mandatory training courses. Additionally, the lawsuit alleges that they violated the Fair Labor Standards Act (FLSA) which makes it illegal to refuse any employee their due wages or to pay less than time-and-a-half for time worked over 40 hours in a work week and requires employers to maintain accurate records of hours actually worked by all of their employees.

Contract workers versus employees

Under the ZipRealty model, a federal judge recently ruled that their agents are employees and they are subject to FLSA laws, while the brokerage has said in previous cases that their agents are “outside sales person” who work on a contract basis.

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“We learned in the course of the Bakersfield case that ZipRealty real estate agents frequently received no pay at all,” said Labor Commissioner Julie Su in a statement. “The lawsuit filed today seeks to remedy the multiple violations statewide and to get these workers the wages they earned.”

“It is our job to provide basic protections for all employees working in California,” said Christine Baker, acting director of the Department of Industrial Relations. “Wage compression and violations of the minimum labor standards are now occurring in a wide variety of occupations, even affecting employees outside traditional low-wage occupations.”

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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