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9th Circuit Reverses PwC Wage and Hour Lawsuit

By Tanya Roth, Esq. | Last updated on

The company formerly known as Price is breathing a sigh of relief today, as the U.S. Ninth Circuit Court of Appeals took their side in a wage and hour lawsuit this week.

Anyone who worked at one of the “Big 4” accounting firms could tell you about the grueling hours they likely had to put in, particularly during tax season. So is it any surprise that there would eventually be wage and hour lawsuits against those firms? According to the Sacramento Business Journal, the PricewaterhouseCoopers lawsuit isn’t a new phenomenon. In 2007, BDO Seidman was sued under a similar premise.

In a class action lawsuit against PwC, (officially known as PricewaterhouseCoopers but recently rebranded to be known simply as "PwC"), two-thousand unlicensed junior accountants brought a wage and hour lawsuit against the accounting giant, alleging that they were not paid their mandatory overtime, under California law.

Essentially, workers who work more than forty hours per week would be entitled to overtime pay. There are exceptions to that, namely the professional exemption, the executive exemption and the administrative exemption.

According to Reuters, a lower court had previously found that PwC could not exempt the unlicensed accountants from California's overtime laws, as a matter of law. The court ruled that the only exemption that applied to accountants was the professional exemption, which made reference to "licensed" accountants. As such, the unlicensed accountants were not exempt. This decision was reversed by the Ninth Circuit Court of Appeals, however.

The Ninth Circuit allowed issue to be litigated and remanded it to district court, noting that if the professional exemption extended to all unlicensed professionals, there would be troubling results.

"California employers would likely have to pay mandatory overtime to the following hypothetical professionals: a recent medical-school graduate working as a resident at a hospital; a first-year associate at a California law firm who has taken the California bar exam but not yet received his results; a law clerk on the Supreme Court of California who is waiting until after her clerkship to take the bar exam."

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