A state judge in Los Angeles has approved a $10.5 million class action settlement in a wage-and-hour lawsuit involving Aon Corp. units in California that were accused of misclassifying more than 500 employees.

The litigation was filed in 2007 by Aon employee Francisco Hoyng, who was replaced as the lead plaintiff about a year later by Robert Zajac.
The class action accused the Aon units of misclassifying as exempt from overtime and meal and rest break requirements employees who held one of several titles: account specialist, senior account specialist, relationship specialist, account manager, client specialist, client services representative and/or customer service representative.

A Los Angeles Superior Court judge approved the $10.5 million settlement of the suit involving the Chicago-based brokerage on Tuesday. The class action was certified last year, according to the settlement agreement.

The settlement applies to 534 class members, according to Agoura Hills-based law firm Martin & Saltzman L.L.P., which represented them.
As part of the settlement agreement, Aon denied any liability or wrongdoing, according to the settlement agreement. An Aon spokeswoman had no comment.

Wage-and-hour suits have become a significant problem for employers in recent years, resulting in numerous costly settlements every year. Los Angeles-based Farmers Insurance also announced on July 7 a settlement with customer service reps over back wages.

Farmers Insurance will pay more than $1.5 million in overtime back wages to 3,459 employees for unpaid pre-shift work they performed.
The U.S. Department of Labor (DOL) reported Farmers has agreed to pay the back wages after its investigation uncovered “significant and systemic violations of the federal Fair Labor Standards Act’s (FLSA) overtime and record-keeping provisions.”

The violations reportedly took place at 11 customer-service call centers in Florida, Kansas, Michigan, Oklahoma, Oregon and Texas.
DOL investigators found the carrier did not account for time employees spent performing pre-shift work. Employees routinely performed an average of 30 minutes of unrecorded and uncompensated work, according to the DOL.

Pre-shift work included turning on work stations, logging into the company phone system and initiating certain software applications necessary to begin their call-center duties.

The employees are owed time and one-half of their regular rates exceeding 40 hours.

The DOL reported that Farmers has agreed to pay back wages and maintain future compliance with the FLSA by properly recording and compensating all hours worked by employees.

“Failing to properly compensate employees for pre- or post-shift work is a violation of federal law,” Secretary of Labor Hilda L. Solis said in a statement. “The Labor Department is committed to ensuring that employers abide by the law so that workers are protected against exploitation and law-abiding employers are not placed at a competitive disadvantage.”

Under FLSA, covered employees are paid for pre-shift and post-shift job duties and for attending meetings. Employers must pay the federal minimum wage of $7.25 an hour and maintain accurate time and payroll records.