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San Leandro HR Company Ordered To Pay $1M In Back Overtime Wages

SAN LEANDRO (CBS SF) -- A San Leandro-based human resources outsource provider will pay $1 million in back overtime wages and damages to hundreds of employees for widespread violations of the federal Fair Labor Standards Act, the U.S.  Department of Labor said Monday.

The federal agency said its Wage and Hour division cited TriNet Human Resources Corp., which is headquartered in San Leandro and has offices nationwide and in Canada, for failing to pay time-and-a-half to 267 employees who worked more than 40 hours per week.

TriNet, a publicly-traded company that had $2.7 billion in revenue in 2015 and provides human resources for small- to medium-sized businesses, will pay back pay wages and damages to workers in amounts ranging from a few hundred dollars to more than $13,000 per worker, according to the Department of Labor.

The federal agency said it also assessed $58,000 in civil penalties for the violations.

In 2012, TriNet paid $326,000 in back wages and damages after the division found similar violations, according to the Department of Labor.

TriNet said in a statement that it is "fully committed to compliance with all of its obligations as an employer" and it thought that the employees who will receive back wages and damages were exempt from the Fair Labor Standards Act.

"TriNet falsely believed that raising an employee's salary exempted them from receiving overtime pay. Hopefully, the company will now pay better attention to the rules going forward and pay its employees the wages they earned," Susana Blanco, the Department of Labor's Wage and Hour director in San Francisco, said in a statement.

According to the Department of Labor, TriNet offers payroll processing, human capital consulting, employment law compliance and employee benefits, including health insurance, retirement plans and workers compensation insurance.

The Department of Labor said the Fair Labor Standards Act requires that covered, non-exempt workers be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus one and one-half times their regular wages for hours worked beyond 40 per week.

The federal agency said employers also must maintain accurate time and payroll records and are prohibited from retaliating against workers who exercise their rights under the law.

TriNet said it voluntarily cooperated with the Department of Labor in a review of the overtime exempt classification of a job position at TriNet but the agency "ultimately disagreed with our assessment that the duties in this newly-created position included a sufficient exercise of independent judgment and discretion for the employees to be exempt."

The company said, "The salaries of the employees at issue were increased commensurate with the employees' change in responsibilities, not for the purpose of contending they were exempt. TriNet voluntarily agreed with the DOL to compensate the employees for their previous work without any admission of liability."

TriNet added, "We expect this matter to be fully resolved this quarter."

© Copyright 2016 by CBS San Francisco and Bay City News Service. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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