Senate Dems call for investigation into Wells Fargo's wage practices

Senate Dems call for investigation into Wells Fargo's wage practices
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Eight Democratic senators are urging the Obama administration to launch an investigation into whether Wells Fargo violated wage and labor rules amid a protracted fraud scheme.

The senators sent a letter asking Labor Department Secretary Tom Perez and Wage and Hour Division Administrator David Weil to probe if Wells Fargo denied their employees overtime or misclassified them under federal and state labor laws as overtime-exempt under the Fair Labor Standards Act (FLSA).

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"Any such investigation should include a comprehensive inquiry into whether Wells Fargo aggressively skirted overtime laws — 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 by the FLSA,” the senators wrote.  

They said the allegations are worrisome with the Labor Department's updated overtime regulations set to take effect on Dec. 1.

“It is critical that the department investigate Wells Fargo now to ensure that the bank is not poised to skirt the forthcoming rule," the senators wrote.

Warren blasted Wells CEO John Stumpf during a Senate Banking Committee hearing on Tuesday demanding that he resign and face a criminal investigation.

“The emerging portrait of the company's actual behavior suggests potential widespread exploitation of its own workforce in order to facilitate the widespread exploitation of its customer base," the senators wrote.

The outspoken critic of Wall Street asked Stumpf why he and other executives hadn’t been punished after the Consumer Financial Protection Bureau (CFPB) levied an $185 million penalty against the bank for allegedly creating more than 2 million checking and credit card accounts not authorized by customers.

About 5,300 employees were fired over a five-year period.

Warren said Stumpf should have to forfeit part of his $19.3 million annual salary for not working fast enough to stop the widespread problem.

The senators say that the CFPB's investigation also "uncovered a workplace characterized by stringent sales quotas and aggressive incentives imposed on its employees, and staggering neglect by management of the obvious consequences to consumers of those quotas and incentives."

Stumpf’s suggestion that the bank didn't provide incentives for the misbehavior “does not appear to be grounded in reality," they wrote.

“Such executives literally have millions of reasons to peddle the fanciful notion that the company's culture, policy and practices played no role in encouraging thousands of Wells Fargo employees to drive up customer numbers by any means necessary,” the senators wrote.

Warren also questioned why executive Carrie Tolstedt, who ran the retail group that oversaw those 5,300 fired employees, is still expected to receive a nearly $100 million pay out in stocks when she retires from the bank at the end of the year.