To say that Wells Fargo has been having a bad few weeks might be an understatement: from being ordered to pay $185 million for the opening and closing of two million unauthorized consumer accounts to being party to federal investigations and being grilled on Capitol Hill. But it doesn’t look like things are going to get any easier for the company, as lawmakers are now urging a probe into whether it violated labor laws.
A group of eight senators sent a letter [PDF] to Labor Secretary Tom Perez urging for an investigation into whether or not the bank violated wage and hour laws by allegedly failing to pay overtime to tellers and sales representatives who worked late to meet sales quotas.
The letter — signed by senators Elizabeth Warren (MA), Sherrod Brown (OH), Jack Reed (RI), Robert Menendez (NJ), Bernie Sanders (VT), Jeff Merkley (OR), Kristin Gillibrand (NY), and Mazie Hirono (HI) — takes aim at Wells Fargo’s alleged actions against employees for potentially failing to make sales goals.
The senators claim that the Consumer Financial Protection Bureau’s report found that Wells Fargo’s workplace environment included “stringent sales quotas” and “aggressive incentives” imposed on its employees.
For years, the letter states, Wells Fargo employees have described a management culture characterized by “mental abuse,” being forced to work overtime “for what felt like after-school detention” during the week and on weekends, and being “severely chastised and embarrassed in front of 60-plus managers.”
In light of the allegations, and the firing of 5,300 employees over the past five years without making any changes to sales practices, the senators believe a comprehensive inquiry into Wells Fargo is needed.
“There is no excuse for participating in fraudulent conduct, and it is entirely appropriate for those Wells Fargo employees implicated in this illegal scheme to be held accountable to the full extent of the law,” the lawmakers write. “But the suggestion last week by Chief Executive John Stumpf that ‘[t]here was no incentive to do bad things’ at Wells Fargo… does not appear to be grounded in reality.”
An investigation by the Dept. of Labor is needed, the senators say, because of the bank’s current strategy of paying settlements without admitting wrongdoing, and then making no changes to its compensation practices.
Should an investigation be initiated, the senators are urging that it include an inquiry into whether Wells Fargo aggressively skirted overtime laws by failing to pay overtime to bank tellers and associates who stayed late or came in on weekends to meet their sales quotas, or misclassifying salaried bank associates as overtime-exempt to avoid paying the overtime guaranteed to them under federal law.