California mortgage lender sued for underpaying employees

A California-based mortgage lender is facing a lawsuit after accusations it did not accurately pay employees for time worked.

San Diego labor law attorneys at Zakay Law Group filed a representative action complaint Monday in San Diego County Superior Court of the State of California against Hometown Equity Mortgage, which does business under the name of theLender. The suit accuses the lender of violating 17 sections of the California labor code, including failure to provide compliant meal and rest periods, pay all minimum, regular and overtime wages and pay sick time and overtime at the correct rate.

The lawsuit also alleges Hometown did not allow employees to take duty-free, off-the-premises rest periods, maintain true and accurate records, provide accurate itemized wage statements, pay amounts due during and upon termination of employment nor reimburse for business expenses, which were primarily related to the costs of using personal cell phones and home internet.

Under California law, every employer must pay its employees on the established payday no less than minimum wage for all hours worked, whether the compensation is measured by time, piece or commission. Hours worked is defined in the wage order as "the time during which an employee is subject to the control of an employer and includes all the time the employee is suffered or permitted to work, whether or not required to do so." 

Hometown allegedly required its employees to perform work before and after their scheduled shifts, as well as during their off-duty meal breaks. The lawsuit said Hometown did not compensate its employees for any of the time spent under the employer's control while working off the clock. Thus, the lender failed to pay its employees the minimum wage for all hours worked in a payroll period, according to the complaint.

In accordance with the labor code, aggrieved employees are entitled to thousands of dollars each, depending on the number of violations against them.

Zakay did not respond to a request for comment.

Previous employee litigation against lenders

Better Mortgage settled a similar lawsuit earlier this month. The lender will issue a total of $7.1 million to hundreds of current and former underwriters over alleged unpaid wages. The case, initially filed in September 2020, accused Better of not paying employees for overtime or meal periods. 

Freedom Mortgage also agreed to a $750,000 settlement to resolve a Fair Labor Standards Act complaint from a class of more than 900 employees. The lawsuit, filed last March, claimed current and former staff worked unpaid overtime.