KPMG's Canadian member firm said it has begun to implement a plan to reimburse employees for unpaid overtime after it was slapped with a class action lawsuit.

The firm said it has developed an overtime redress plan to compensate employees for all unpaid overtime going back to Jan. 1, 2000.

An independent third party, Crawford Class Action Services (Canada), will administer the plan for KPMG. Crawford will notify KPMG's current and former employees through individual letters as well as ads in Canadian newspapers. KPMG estimates the total payout will be less than $10 million.

"We very much regret that we did not pay overtime when it was earned by current and former employees," said Bill MacKinnon, chief executive of KPMG's Canadian firm, in a statement. "While this was an error of omission, not commission, it should not have happened. The principles of the plan will be reflected in all KPMG's overtime remuneration in the future."

KPMG added that the plan was not an admission of liability and that it still plans to defend itself against any motion brought in the class action suit.

Lawsuits involving overtime pay have also been brought in California against the six largest accounting firms.

Ed Nusbaum, CEO of Grant Thornton, told WebCPA that most large accounting firms do not pay overtime anymore to avoid overworking employees, but that Grant Thornton offers bonuses instead. "I'm not anxious to go back to overtime or time and a half," he said.

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