It’s a funny thing: financial advisors position themselves as professionals, sometimes even comparing themselves to doctors and lawyers in responsibilities. Yet, like working stiffs, they want their overtime too. UBS today said it had agreed to pay $89 million to settle class-action wage and hours claims of reps filed this past summer in several federal courts.
According to a UBS release, the settlement resolves claims that UBS incorrectly classified financial advisors and financial advisor trainees as exempt from overtime pay under federal and U.S. state laws. The stated reason for the settlement, according to the release, was the firm “did not believe protracted litigation in multiple courts was in the best interests of employees or clients.”
The UBS lawsuits, along with others filed against Morgan Stanley, Smith Barney, Wachovia and Ryan Beck, came on the heels of Merrill Lynch’s $37 million wage and hour settlement in August. Reps at the firms alleged that the firm not only improperly exempted them but also docked their compensation and used it to pay for things like administrative assistants and support.
Some firms reportedly were considering revamping compensation practices to include a base salary for employees paid on a transaction basis because federal law exempts some employees with a “minimum guaranteed salary” from overtime pay.
The firm said “the vast majority” of this amount was provisioned for in its third quarter earnings, solving the mystery of the vaguely disclosed legal costs the firm accounted for in its third quarter earnings statements. Approximately three-quarters of the settlement will be available to employees via a claims process that must be approved by the court. The court is still determining final details of the payment process. The remaining money will be used to pay administrative and legal costs.