Commentary

Employers must invest in FLSA compliance before employees invest in lawsuit $350.00 . . . That’s the fee for an employee to start a lawsuit in federal court to seek unpaid overtime wages under the federal Fair Labor Standards Act (FLSA), which requires that employers pay time-and-a-half for each hour over 40 worked during any week. In 2008, 5,318 new FLSA lawsuits were filed nationwide, according to the Administrative Office of U.S. Courts. Of those, 2,383 were filed in Florida. Of the lawsuits filed in Florida, 1,315 – more than half – were filed in the U.S. District Court for the Southern District of Florida, which includes Miami, Ft. Lauderdale, West Palm Beach, and Port St. Lucie. In the U.S. District Court for the Middle District of Florida (which includes Orlando, Tampa, and Jacksonville), 1,031 new FLSA cases were filed in 2008. Compare South Florida and Central Florida to the U.S. District Court for the Northern District of Florida, in which only 37 new FLSA cases were filed in 2008. In contrast, in the entire state of California, 353 new FLSA lawsuits were filed in 2008; in New York, 555; in Texas, 354; in Nevada, 17. An average of 28.7 percent of all FLSA cases filed in the entire United States during the past five years have been filed in the Southern District of Florida, according to a court order recently entered by U.S. District Judge Kenneth L. Ryskamp, in which Judge Ryskamp sanctioned a plaintiff’s attorney’s law firm for improperly soliciting clients to join a FLSA lawsuit. The law is unquestionably one-sided, in favor of the employee. A successful employee can seek reimbursement of his attorney’s fees from the employer. However, an employer who successfully defends a FLSA lawsuit the employee. Plus, as is common in personal injury cases, most plaintiffs’ attorneys will front costs (such as the $350 filing fee) and file these lawsuits based on an agreement that the attorney will only collect his fees if they win. Lawyers for the employees regularly solicit other employees at the same company to join the suit. In some FLSA lawsuits, an employee will claim that the employer as employers to pay overtime). For some jobs, the answers are clear. Doctors are exempt. Cashiers are non-exempt. But what about a “store manager”? An “IT consultant”? A “field technician”? A store manager at one company might qualify for an exemption, and a store manager at another company might not. Determining whether a position is exempt requires an analysis of the job duties, not the job title. Other common mistakes by employers involve: cannot seek reimbursement of its attorney’s fees frommisclassified the employeeexempt. Under the FLSA, employees are either exempt from overtime (which meansdo not have to pay for overtime), or non-exempt (which means employers do haveSalary. only A salary does not make an employee exempt from overtime. Payment by a salary isone factor that a court considers and, in some instances, is totally irrelevant.Independent Contractors. does not actually transform the employee into an independent contractor. Courts consider several factors, including the amount of control exercised by the employer, use of equipment and helpers, and special skills. Slapping the label of “independent contractor” on an employeeComp Time. week, and 35 in the next week, and then “combine” the weeks to avoid paying overtime. The employer must pay for the five hours of overtime worked in the first week. Generally, an employer cannot allow an employee to work 45 hours in one􀁺 For employers who think they are saving money by failing to comply with the FLSA, any such savings are short-term. In addition to paying the employee’s attorney if they lose, an employer must pay an attorney to defend itself. Sexual Harassment in the Workplace Changes To Construction Law – 2008 “Guns at Work” Law Update to “Guns at Work” Law Background Checks for New Employees The Revised A1A Contract: Rethinking Arbitration Pregnancy Discrimination Claims The Revised A1A Contract: Shifting Risk to the Contractor Partial Waivers/Release of Lien Employers Should Invest in FLSA Compliance Public Works Bond Requirements Protect Against Employee Theft Changes to Construction Law – 2009 Let Go the Fear of Letting People Go Review “Time Off” Policies Commercial General Liability Insurance Compliance Employers are often scared and surprised to learn that the corporate entity does not evenprovide full protection in FLSA lawsuits. The definition of “employer” is very broad, allowing employees to name As for damages, losing employers will likely pay overtime wages for the past two years and, in some cases, up to three years. A few things that business owners can do to prevent claims of FLSA violations include: • Establish an Overtime Policy, distribute it, and enforce it. Employers should discipline (but must still pay) non-exempt employees who work overtime without advance permission. Discipline can include an oral warning; placing a written warning for violation of company policy in the employee’s personnel file; and termination. If an employee later claims he was terminated for exercising his rights under FLSA, you will have some evidence that the employee was actually terminated for violating company policy. • Establish a Reporting Policy requiring employees to report, for example, any incidence of being asked to work off-the-clock, and inaccurate paychecks that do not reflect overtime worked. The Reporting Policy should require employees to report these types of FLSA violations to a specific person (i.e., “manager”) within a given time period. When an employee complains using the procedure, promptly investigate and correct any problems. If an employee fails to follow the established procedure and later brings a lawsuit under FLSA, an employer may be able to ask a court to consider the employee’s failure to follow the reporting procedure. Even if some courts will not consider the employee’s failure to following the reporting procedure as a defense, this policy should prevent some claims from ever becoming lawsuits in the first place. • Create written job descriptions with an attorney. If you already have them, have an attorney review them. Provide written job descriptions to employees. Job descriptions can be evidence to support a defense if a claim of misclassification arises. • Train your employees in the company’s timekeeping procedures, and keep copies of time records. If a non-exempt employee claims that he is owed unpaid overtime wages, an employer needs to dispute the claim with an accurate figure. • Although employees cannot waive or release their right to overtime pay, employers can try to reduce the risk of claims by employees who leave or are laid off. Paying employees a severance often prevents employees from leaving with a “bad taste” in their mouths. In exchange for the severance, employers can have employees waive or release many other claims, and can ask employees to affirm that they have reported all hours worked and been paid all money which they may be entitled to. Unprepared employers who do not want to invest the time and money in complying with FLSA should beware of the potential for a crippling damages award. $35 million . . . That’s one-hundred thousand times the original $350 filing fee. That’s the amount that Family Dollar Stores, Inc. was ordered to pay for misclassifying 163 store managers as exempt from overtime pay. Following an appeal, the U.S. Court of Appeals for the Eleventh Circuit, whose decisions apply in Florida, affirmed the judgment in 2008. Not a bad return. individual corporate officers as defendants in some instances.double the amount of the employee’s unpaidThe West Palm Beach law firm of Bruce Loren & Associates specializes in the representation of businesses and management in the construction industry. The firm assists businesses of all sizes in complying with employment laws such as the Fair Labor Standards Act to reduce the risk of claims and litigation, often for a flat fee. Bruce E. Loren, Esq. is board-certified by the Florida Bar in construction law. Cara F. Barrick, Esq. focuses her practice on employment issues that are unique to the construction industry. The Power of One

by Bruce Faulmann

Bruce Faulmann, Publisher I’ve been fascinated by fables since I was a kid watching “Rocky and Bullwinkle” cartoons. Most episodes had a segment based on “Aesop’s Fables,” with the narrator telling the lesson-based stories of the ancient philosopher accompanied by a silly cartoon illustrating the point. As I recall, most lessons were about doing the right thing, being a good citizen and the power of the individual.  One fable that I’ve used in speeches over the years — frankly I don’t recall where I first heard it, but it’s probably safe to say it wasn’t on the “Rocky and Bullwinkle” show — is the story of a father and son walking on the beach, where they encountered hundreds of starfish washed up on the sand. Knowing the fate of the starfish, out of the life-supporting elements of the water, the young boy starts picking up the starfish, throwing them one by one back into the ocean. Observing his son’s valiant efforts, the father declares, “Your efforts are admirable, but there are so many, you’re not going to make a difference.” The son replies as he continues picking up each starfish and throwing it back into the water, “It makes a difference to this one, and this one, and this one … .” The lesson of the story, of course, is that one person can make a difference. Which leads to the question: What can one Floridian do to improve the state’s battered image and damaged economy? In my humble opinion, a lot. So with that in mind, here are few thoughts for each of us to consider that could go a long way toward helping Florida’s recovery: » If you’re on the verge of completing a deal, but because of the uncertainty in the economy you are apprehensive about pulling the trigger, go ahead and pull. Your hesitation is understandable, but those who act now are likely to be the most successful as the economy rebounds.  » If you’re responsible for meeting a payroll and your business is still turning a profit, keep people employed. Profitable businesses willing to accept a bit smaller margin can go a long way toward stopping the continued job losses, which in turn will boost consumer spending crucial to our recovery. » If you have contacts outside of the state — and most of us do since Floridians come from all over the country — make a commitment to call one of them each week and say, “Florida’s open for business. Let’s talk.” » Make that extra sales call. Be more productive each day. Stretch your mind for new ideas and innovations to grow your business. » Volunteer or give more to your favorite charity or community-building entity. It’s good for the soul and the economy. » If you’re on Twitter or Facebook, post positive messages about Florida, your business and your community on a daily basis — or multiple times a day if you’re addicted to social media sites. » Most important, be positive! There’s a positive aspect to everything. Let’s work hard to find it and share it. In this economy it’s tough to feel like we’re in control, but we do have control over our actions. If each one of us steps it up a notch, we can make Florida stronger and better. — Bruce Faulmann Publisher