• PwC Wage and Hour Class Action – FYI

    By • Jun 17th, 2008 • Category: Pure Content

    I took a look at the complaint in this case and PwC’s answer.

    These documents are available on the website described in the press release below.
    Take a look at this response to one of the most important points of fact in the complaint and tell me what you think is wrong with this picture..
    “Answering paragraph 4 of the Complaint, PwC admits Plaintiffs are individuals and residents of the State of California. PwC further admits that Plaintiffs were employed by PwC as “associates”in PwC’s Assurance Line of Service. PwC is without knowledge or information sufficient to form a belief as to the truth of the allegations concerning Plaintiffs credentials or degrees, licensing status by a state or federal agency, test status or “Certified Public Accountant” or “CPA” designation from the State of California, and on that basis denies such allegations. PwC admits Plaintiffs bring this action as a proposed class action on behalf of themselves and certain current and former California employees of PwC. Except as so admitted, PwC denies each and every allegation ofthis paragraph in the complaint. “

    Hey Jude Curtis, PwC Chief Ethics, Risk and Compliance Officer: Shouldn’t you guys know who is licensed in each state, each and every state where your professionals work and travel, and whether a particular person has proper credentials and degrees to be an auditor?

    June 17, 2008
    MEDIA ADVISORY
    Contact: Caitlin Prendiville, (212)332-9351

    UNITE HERE Launches Website to Aid PwC Associates

    New York, June 17 – The labor union UNITE HERE has launched a website, www.OverworkedAtPwC.info, which monitors the first class-certified wage and hour lawsuit filed against a Big Four firm, PricewaterhouseCoopers, in the U.S.  This independent website critical of the company is a resource for PwC associates and others in the accounting industry who seek up-to-date information on developments in this potentially groundbreaking lawsuit.

    PricewaterhouseCoopers is the first Big Four firm to become the target of a class certified wage and hour case in the United States. The case could have widespread implications for PwC, the nation’s largest accounting firm which operates in 34 states, and for other major accounting firms nationwide.

    While PwC has denied that it is breaking federal wage and hour laws, the firm recently announced a redress plan of its overtime policies in Canada on the heels of a similar class action lawsuit against Big Four firm KPMG.

    On March 25, 2008, Judge Lawrence K. Karlton of California’s Eastern District Court granted class certification to Campbell v. PricewaterhouseCoopers.  The plaintiffs, a group of former PwC associates filed the lawsuit against the Big Four accounting firm for allegedly misclassifying certain employees as exempt from receiving overtime pay. The suit, filed on October 27, 2006, covers all associates in PwC’s Attest division who worked at PwC offices in California between October 27, 2002 to the present.

    Court documents submitted by the plaintiffs describe the atmosphere for unlicensed accountants at PwC as a kind of “white collar sweatshop” where associates are expected to work 50 – 70 hour weeks, and work through weekends and holidays without receiving overtime pay. Court documents related to the case can be accessed at OverworkedAtPwC.info.

    OverworkedAtPwC.info invites former and current PwC associates, who believe they have been wrongfully classified as exempt from overtime, to contact us at info@overworkedatpwc.info for more information about the lawsuit.

    UNITE HERE is a labor union representing over 465,000 workers in the hotel, casino, food service, apparel and textile industries.

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    20 Responses »

    1. Where’s the PCAOB? Shouldn’t it expect that PWC knows who is or isn’t a CPA? What’s going on here?

    2. Of course, PWC should know who is or is not a CPA. If, in fact, they really don’t then they are sorely negligent. It’s a lame excuse regardless.

      Do people exploit people? People DO! And, oh how we do it. We’ve been doing it since the beginning of recorded history, at least. That we do it is bothersome, but that we deny down to the core what we’re doing, that’s what makes me wretch. Maybe we should give awards for the most creative way we’ve come up with to justify our actions. But see, even then, PwC loses out for lack of innovation.

    3. FYI, the Canadian PwC overtime deadline was two days ago.

      Hopefully everyone who was eligible reads the Business Section classifieds or got the news in some other way.

      Word on the street is that the verification/payment process can take at least three letter exchanges and roughly at least as many months before the cash is sent out.

    4. Whether PwC knows who their CPAs are is not really the point, is it? (They do know; however, they have neglected to inform their outside counsel of that information.)

      The real point is that the partnerships control all the information and are in a superior bargaining position with their employees. When I was at E&Y (years ago) there was a sad joke circulating about how many loss, litigation settlement, and other accruals the partnership needed to make in order to drop income below the bonus formula thresholds. No matter how well the practice or the line of service or the firm did, we never seemed to do well enough to generate the kind of bonuses to which we were theoretically entitled. And try to negotiate your annual pay increase? Forget it.

      It was obvious to me then, and I still firmly believe it today, that the only solution is for the staff to unionize and engage in collective bargaining. I say that as a card-carrying Republican conservative for nearly two decades.

      But who’s going to be the first to issue the call for action? Talk about a career-limiting move …

    5. Anyone who signs on to an accounting firm knows the deal coming in. “WAIT! you want me to work long hours? When did this start?” The irony is that law firms are worse and somewhere, a bunch of law firm associates at the plaintiff’s law firm are working overtime to prep for this case.

    6. Anonymous 2: I’ve said it before, “irony is a bitch”. Although, I have heard associate lawyers can do actual work during their first years that would classify them as exempt. Drafting a legal memo from scratch is considered exempt work. If you are staff at PwC and you copy documents all day, that’s hardly exempt work.

    7. Anonymous2: Let me add to Anonymous3’s input.

      It is quite true that incoming staff understand that long hours are a part of the dues they will pay. But they expect to be paid for those hours in a manner compliant with state and Federal labor laws.

      Waiving one’s statutory rights is not a Big 4 admittance requirement. (Well, maybe on Independence issues, but that’s arguably imposed by a different statute.) Said differently: when one enters the accounting (or tax or management consulting) profession in the prestigious Big 4, one does not expect to become complicit in an (alleged) attempt or conspiracy to violate labor laws.

      Work the hours, yes. But get paid for the hours worked in accordance with the law.

    8. @Anon4 Thanks for the input. Could not have said it better myself.

    9. As a former PwC auditor, they may know now about their employee’s CPA licensing status NOW due to the new requirements; however, historically speaking, they absolutly have NO idea. All of these records were maintained ad-hoc at individual offices via MS Excel spread sheets!!!

    10. Former PwC’r as well, and they DO know who is licensed or not. They have a tracking system which requires you to input your credentials.

    11. @anonymous Yes, they may ask you to input your credentials, somewhere. But is anyone looking at that? Do they follow-up when someone has not paid dues or kept up license? Are they quick on warning you about CPE requirements? Do they have a good way to make sure anyone working in particular place has a valid license to work there?

      The problem is that auditors travel and get assigned to clients outside their original licensing state. Partners are often responsible for clients with HQ outside their original licensing state. How many of your colleagues are licensed in more than one state? Do they have to be? Is any one managing this process.

      Does the PCAOB care? Is anyone checking this when they inspect the firms? Would we ever know, since this part of the report is private?

    12. What is the current status of the pending overtime lawsuits against the various big 4 accounting firms in Canada? Anyone?

      As for pending big 4 overtime lawsuits in the State of California, the plaintiffs in Deloitte & Touche (www.dtlawsuit.com) have filed papers seeking class action certification. In other words, DT may be next in line after PwC to have a class action certified in an unpaid overtime lawsuit. In addition to PwC and D&T, Ernst & Young (E&Y) is also facing an unpaid overtime lawsuit in California (see http://www.eylawsuit.com as well as http://www.big4lawsuit.com).

    13. Of the big four accounting firms in California, it looks like PricewaterhouseCoopers (PwC) will be the first to go to trial in March 2009 regarding unpaid overtime: http://www.kcrlegal.com/news/PwC-wage-and-hour-lawsuit.asp

    14. PwC absolutely does this – you hear it over and over from any unlicensed accountant (ie – someone working towards their CA here in Canada).. My cousin figured that she was working for about $2/hr, she finally quit.

      You cannot make your employees work that hard without sufficient pay and without treating them with any sort of respect. Accountants fully expect to work overtime, but they deserve AT LEAST minimum wage to do so. $2/hr is ridiculous.

    15. […] I’ve mentioned it before. […]

    16. […] It’s no wonder that with the increase in layoffs and cutbacks at the audit firms during the general economic slowdown, when Sarbanes-Oxley work slowed and the financial crisis hit, accountants starting careers in the new millennium have to squint to see the light at the end of the tunnel. […]

    17. […] It’s no wonder that with the increase in layoffs and cutbacks at the audit firms during the general economic slowdown, when Sarbanes-Oxley work slowed and the financial crisis hit, accountants starting careers in the new millennium have to squint to see the light at the end of the tunnel. […]

    18. […] have written about the Big 4 overtime lawsuits extensively.  My fellow blogger, Krupo at A Counting School, has followed the cases in Canada […]

    19. […] June of 2008, I wrote about it again: Take a look at this response to one of the most important points of fact in the complaint and tell […]

    20. […] It’s no wonder that when the firms started cutting staff during the general economic slowdown, when Sarbanes-Oxley work slowed and then the financial crisis hit, accountants starting careers in the new millennium had to squint to see the light at the end of the tunnel. […]

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