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Will Overtime Lawsuits “Reform” the Big Four?

CPA Trendlines

A New York federal court conditionally certified a national collective action lawsuit that alleges that KPMG LLP violated the federal labor laws by denying thousands of entry-level audit employees overtime pay.

“Denying associates overtime pay is a problem among all of the Big Four accounting firms, not just at KPMG,” says attorney Justin M. Swartz. “We hope that this case, as well as audit, advisory, and tax cases against Deloitte, PricewaterhouseCoopers, and Ernst & Young will reform the accounting industry.”

The latest lawsuit alleges KPMG misclassified “audit associates” as exempt and did not pay them proper overtime wages in violation of the federal Fair Labor Standards Act (FLSA) and the New York Labor Law.

The certification allows KPMG audit associates nationwide to join the case and assert their overtime claims. Audit associates from six states – Florida, Nebraska, New Jersey, New York, Texas, and Washington – have joined the case so far.

The case is “Kyle Pippins, et al., v. KPMG LLP,” in the Southern District of New York, Case No. 1:11-cv-00377-CM-JLC.