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Wipro faces class action complaint in US

Wipro, Suri Payala alleges, intentionally misclassified employees such as him to circumvent local labour laws on wages and overtime.

twitter-logo Goutam Das        Last Updated: May 15, 2015  | 14:25 IST
Wipro faces class action complaint in US
The complaint was recently filed in the Superior Court of the State of California. (Photo: Reuters)

An Indian employee who worked with IT exporter Wipro has filed a class action complaint in the United States alleging that the company had violated local labour codes, failed to pay over-time wages, and wage settlements among others.

The complaint was recently filed in the Superior Court of the State of California.  

The complaint, brought about by Suri Payala, says that he worked with Wipro for the first six months of 2014 as a computer technician with the tile of 'Architect' and he was outsourced to DIRECTV in California. Wipro, he alleges, intentionally misclassified employees such as him to circumvent local labour laws on wages and overtime.

"Plaintiff was not paid overtime and was not paid for his travel time to the outsourced job site, notwithstanding the fact he was paid a salary that was less than $7000 per month. This conduct was in violation of applicable California wage and labout laws," the case papers filed with the court, says.  

According to California's labour codes and wage orders, employers need to pay overtime to any employee in the computer software industry if their compensation is less than $7,010.88 a month (as of 2014).

"Any work in excess of eight hours in one day and in excess of 40 hours in one week and the first eight hours worked on the seventh day of work in one week shall be compensated at the rate of no less than one and half times the regular rate of pay for an employee. Any work in excess of 12 hours in one day shall be compensated at the rate of no less than twice the regular rate for an employee," the Labour Code says. The complaint alleges that Payala and other members of the Class consistently worked three to five days per week for nine hours or more.  

In a Class action lawsuit, a group of people join hands to fight a large corporation for a common cause. According to Payala's estimate, there are over 200 current and former Wipro employees who are "aggrieved" - those with a similar job profile as his in California.  

In a response to a clarification sought by Business Today, the IT major said: "Wipro abides by the laws of every jurisdiction where we do business. While we do not comment on pending litigation, suffice to say Wipro will vigorously defend these allegations."

Class action lawsuits seem to be a growing pain for Indian companies operating in the United States.

In February 2013, TCS reached a $29.75 million settlement for a suit filed on behalf of 13,000 employees. It alleged that TCS had "unjustly enriched" itself by asking all non-US citizen employees to pay federal and state tax refunds to the company. TCS was also making unauthorised deductions from pay cheques.

And in 2011, Mahindra Satyam reached a $125 million settlement with a group of investors who sued the company for damages in the aftermath of the Satyam scam in 2009.

According to US-based law firm Seyfarth Shaw LLP, workplace class action litigation continues to accelerate, resulting in risks for employers. "Skilled plaintiffs' lawyers are continually developing new theories and approaches to complex employment litigation," the firm says in a post on its website.

"At the same time, governmental enforcement litigation pursued by the US Equal Employment Commission and the US Department of Labor manifests the aggressive "push-the-envelope" agenda of two activist agencies, and regulatory oversight of workplace issues continues to be a priority. All of these factors combine to challenge businesses to integrate their litigation and risk mitigation strategies to navigate these exposures."

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