Does the 40-hour work week law cover Wall Street back-office staff who process trades and resolve discrepancies? And legal niceties aside, could paying workers for overtime ever be put into practice in the frenetic and hyper-competitive securities business?
Those questions arise from a lawsuit filed this week against Merrill Lynch and its new corporate parent, Bank of America.
Plaintiffs Andrea Levine and Ivey Moore are derivatives settlement specialists who joined Merrill in 2007 and still work there. Each receives a $65,000 salary and less than $5,000 bonus, says attorney Brian Schaffer of Fitapelli & Schaffer, LLP, the New York law firm representing the Merrill Lynch plaintiffs. Merrill and B of A aren't commenting on the suit.
The popular belief that only hourly or blue-collar workers are entitled to extra pay for longer work weeks is a myth, several employment law specialists who work on either side of the issue told eFinancialCareers News. In reality, federal law sets out very specific criteria that must be satisfied to make a particular job "exempt" from overtime pay.
Stock Brokers, Mortgage Brokers, Accountants
"In every industry it's worthwhile for employees to consider the question of whether they're truly exempt," says Dan Getman, a New Paltz, N.Y. attorney who represents employees in pay cases. "There are many industries in which it's industry practice to treat people as exempt when (legally) they're not."
Within the finance and accounting world, past rulings extended overtime pay to financial advisers, mortgage brokers, and even accountants who perform data-entry work in a Big Four CPA firm.
Based on Fair Labor Standards Act rules, Schaffer says back-office workers in banking "are generally entitled to overtime. They're not doing jobs that require independent discretion and their ability to use their own judgment" - one key factor that would make their work exempt from overtime. "A lot of these people that have left Merrill and have gone to other institutions then did receive overtime," he adds.
Merrill Lawsuit Details
The complaint was filed as a collective action on behalf of the two named plaintiffs and "all those similarly situated" - all who worked for the defendants in the same capacity at any time in the last three years. It states that Merrill and Bank of America currently employ over 30 derivatives settlement specialists.
According to the complaint, those employees process and confirm trades and resolve payment discrepancies involving derivative products. Their duties include inputting data, reviewing items listed on a daily report and ensuring coupon and fee payments are received on the settlement date.
It also says that others who work alongside the plaintiffs and perform "the exact same duties" but are consultants rather than Merrill Lynch employees, get paid time-and-a-half for working beyond 40 hours a week.