A statewide class and collective action has been filed in New York against payroll giant, Paychex, Inc. The action is brought on behalf of all current and former employees who, since December 22, 1997, worked in either inside insurance sales or payroll service sales and were not paid overtime compensation. The action is brought under both New York labor law and the federal Fair Labor Standards Act and seeks back pay, statutory and liquidated damages as well as injunctive and declaratory relief. As a collective action, all potential claimants are required to voluntarily "opt-in" to be a considered a member of the class. The employees have requested that the court issue notice to all potential claimants.

This action arises from what employees claim is a systematic and intentional scheme to deprive hourly employees of proper statutory overtime compensation. Under both the federal Fair Labor Standards Act and New York labor law, all "non-exempt" employees are entitled to, at a minimum, time and a half for all hours worked beyond 40 per week. The Paychex employees, who worked inside sales positions in payroll and insurance service, claim that they were non-exempt, were paid hourly. They assert that Paychex, one of the nation’s largest payroll and tax service providers, was well aware that they were entitled to overtime compensation. The employees allege that Paychex willfully and intentionally failed to pay overtime, that it was, in fact, corporate policy. This, they claim, entitles them to liquidated damages under the Fair Labor Standards Act in addition to compensatory and statutory damages under federal and state law.