Big Four in line of fire from huge class action

US law firm Kershaw, Cutter & Ratinoff (KCR) believes unlicensed associates at Big Four firms have been cheated out of their entitlements to overtime and other benefits under US labour laws and is urging them to join in class action against the firms.

The US labour laws applied to accountants classify those who have obtained a CPA license as ‘exempt’ from provisions which mandate overtime pay and meal and rest periods. However, KCR claims the Big Four have ignored these statutes for years and treated all their unlicensed associates as exempt, in stark contrast to many smaller accounting firms who pay overtime to their unlicensed associates.

KCR has estimated a typical associate who earns $US42,000 (₤20,000) and works about 250 hours of overtime a year may be entitled to about $US40,000 in overtime pay over a five-year period. Add to this substantial penalties and interest which would be imposed for 'wilful failure to pay overtime'.

KCR has already filed a class action suit against PricewaterhouseCoopers to recover overtime pay for its unlicensed associates. The case has been pending for more than a year but an imminent decision is expected on whether the case will be approved as class action. A successful verdict could potentially change the way all the Big Four do business across the US.

Further reading:

KPMG Canada sued for unpaid overtime

PwC objects to PCAOB report faulting its audits