Bank of America Faces Second Worker Suit on PPP Loan Overtime

Bank of America NA workers who processed Paycheck Protection Program loans hit the bank with allegations of violating California wage statutes, echoing earlier claims in a similar suit under New York law.

The bank offered loan officers who processed the PPP loans multiple types of nondiscretionary incentive pay, but it didn’t always include those amounts when calculating the workers’ proper overtime pay rates, according to the complaint filed in the US District Court for the Northern District of California.

A BofA representative didn’t immediately respond to a request for comment Thursday. The bank previously declined to comment on the earlier suit.

The Coronavirus Aid, Relief, and Economic Security Act included funding for loans to keep businesses afloat starting during the early months of the pandemic. Banks like BofA administered the program in exchange for a percentage of the loans they processed and disbursed.

But because the nondiscretionary bonuses weren’t included in overtime calculations, many BofA employees worked long hours helping small businesses without receiving proper compensation, according to the suit three California-based BofA employees filed.

The plaintiffs seek to represent a state-law class and a Fair Labor Standards Act collective on behalf of similarly situated California workers. They accuse BofA of running afoul of California employment laws, including by misclassifying some normally exempt employees whose work processing PPP loans should have entitled them to overtime pay.

The bank initially included the nondiscretionary bonuses in its overtime calculations, but soon “decided that these new rates were ‘inflated’” and switched to using workers’ pre-pandemic base hourly rates for the calculations, according to the complaint, which uses language identical to that in the suit some of the same attorneys filed in the Southern District of New York Aug. 4.

BofA was “fully aware” that determining the workers’ regular rates using pre-pandemic figures was incorrect under federal law, the complaint says. The bank allegedly tried to “conceal the true nature of its overtime pay practices” by giving employees “opaque, confusing, and misleading” information and declining to put at least some details in writing, the workers say.

Employees processing PPP loans often worked more than 70 hours per week, so leaving the bonuses out of overtime calculations meant that the bank “significantly underpaid” them, according to the suit.

BofA sent some employees letters informing them that they had been underpaid due to calculation errors, complete with checks making up the missing funds. But the bank didn’t explain how it came up with those numbers, and the checks didn’t include everything the workers were entitled to, the complaint says.

Hartley LLP and Stueve Siegel Hanson LLP represent the California workers. The latter firm also represents the New York employees.

The case is Lu v. Bank of Am. NA, N.D. Cal., No. 3:23-cv-04027, complaint filed 8/9/23.