Home » Blog » Accountants in Miami » A WAGE AND HOUR UPDATE FOR EMPLOYERS


Recently, we sat down with Mrs. Carmen Rodriguez, a Labor Law Attorney to discuss wage and hour litigation. Mrs. Rodriguez opened by stating “the name or classification you give to your employees can mean the difference between wage and hour compliance and serious liability. In my over 25 years of practice, I have never seen such a dramatic increase in wage and hour litigation as has occurred over the last several years. Many employers believe that wage and hour violations can only be determined by the Department of Labor. That is not correct. In addition to the Department of Labor, employees have a private right of action to sue employers directly for alleged wage violations. In Miami, there are many law firms who specialize in suing employers on behalf of employees for alleged wage and hour violations. We see many wage and hour suits in conjunction with workers’ compensation claims or filed by disgruntled former or current employees”. Some employers believe: “I don’t have any of these concerns because I hire illegals who do not have the right to sue me in court because of their immigration status”- right? Wrong! In addition to the other serious legal violations and pitfalls involved in the hiring of undocumented workers, undocumented workers do in fact have the right to sue for alleged wage and hour violations – in fact, they do so in Federal Courts! Many wage and hour issues can be avoided through the proper classification of employees and proper payroll and timekeeping records.

The Fair Labor Standards Act (“FLSA”) recognizes two primary types of employees: “nonexempt” (hourly paid employees who are NOT exempt from the overtime laws – that is, employees who must be paid an hourly wage and overtime for all time worked over 40 hours); and “exempt” (salaried employees who are exempt from the overtime pay requirement). Some employers believe: “I don’t have wage and hour overtime issues because I pay all my employees on a salary basis”- right? Wrong! The FLSA has strict guidelines as to which employees can be paid on a salary basis and which must be paid on an hourly basis with overtime due, based on the type of work the employee performs, education and management structure. Taking into consideration the FLSA and minimum wage laws, we find that in most matters that come to us it is often not an issue of paying an employee more in the bottom line, it is simply an issue of having the correct pay structure for the class of employee together with proper record keeping and documentation.   There are also tests by the Courts and the IRS as to whom properly qualifies to be paid as an “independent contractor.” The FLSA and the minimum wage laws allow employees who successfully sue their employers for wage and hour violations to recover not just their back wages but, their back wages x2 (called liquidated damages) in addition to their attorneys’ fees and costs — all paid by you, the employer! The misclassification of employees, even if well intentioned, can result in costly litigation and other legal headaches.

It is important for employers to conduct their own wage and hour audit to ensure they are in compliance and correct any issues.   Correcting issues before they result in litigation can avoid liability and these corrections can constitute “good faith” that can assist with liability concerns. By the way, certain pay and time keeping requirements also apply to domestic service employees; yes, your housekeeper is protected by the FLSA too!

Carmen Rodriguez, Esq.