NILICO Hit with Lawsuit Claiming Agents, Trainees Owed Unpaid Wages

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National Income Life Insurance Company (NILICO) has misclassified sales agents as independent contractors and failed to pay them for time spent training, a proposed class and collective action alleges.

According to the case, the workers should have been classified as bona fide employees entitled to minimum and overtime wage protections and reimbursement for business expenses.

The workers relied to their detriment on NILICO’s representations that they were not entitled to pay for time spent in training, the suit says. Per the complaint, NILICO workers are owed unpaid wages and reimbursement for business expenses that include the costs of training classes, licensing exams, laptops and software required for the job and cell phone usage to schedule appointments for the defendant’s benefit.

The case claims NILICO, which sells life insurance and annuities through its field agents, exercised significant control over its agents’ and trainees’ job duties, including by requiring the workers to be on site or shadowing agents during certain hours and withholding from them the freedom to make their own decisions with regard to schedules and other job specifics.

Per the suit, the defendant controlled not only the result of trainees’ and agents’ work but the “method and means” by which the duties were handled. The case alleges NILICO, not its workers, determined agents’ and trainees’ hourly rates of pay, payment and invoicing dates; whether additional hours would actually be paid; what items would be reimbursed; and the fact that the workers would be responsible for the defendant’s side of employment taxes and business-related expenses.

“Plaintiff and other Trainees and Agents, at all relevant times worked under and subject to the control of Defendant as set forth in Defendant’s numerous policies, practices and procedures,” the complaint states.

As a result of NILICO’s misclassification of its workers as independent contractors instead of employees, the agents and trainees did not receive at least the minimum wage for every hour worked and were not paid proper overtime wages and commissions owed to them, the lawsuit alleges. Moreover, trainees are owed wages for unpaid training time that should have been classified as employment, the suit says.

The lawsuit looks to certify a proposed class of individuals who worked for the defendant in New York as insurance agent trainees or insurance agents within the six years prior to February 13, 2020 and through the date of judgment in the case, as well as a proposed collective of those who did so within the three years prior to February 13, 2020 and until the date of judgment.

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