POSTED BY ASHLEIGH BHOLE ON APRIL 24, 2013

In this case, the named plaintiff, Laura Symczyk, was a registered nurse employed at a Genesis Healthcare nursing home facility. In 2009, Symczyk sued Genesis on behalf of herself and all other "similarly situated" employees alleging that Genesis failed to pay her for 30 minutes of meal breaks when she had not actually taken all or some of the break. Genesis answered the complaint and made a Rule 68 offer of judgment, offering to satisfy all of Symczyk's claims for $7,500 in unpaid wages, plus attorneys' fees, costs and expenses to be determined by the Court. Symczyk failed to respond to the offer.

Genesis then moved to dismiss the entire suit on the basis that the named plaintiff no longer had a "personal stake" in the outcome, as she had been offered all the relief she was seeking. The district court agreed and granted Genesis' motion to dismiss. However, on appeal, the Third Circuit reversed and remanded the decision, holding that while Symczyk's personal claim was mooted, the collective action was not necessarily moot. The court concluded that the use of offers of judgment before class certification could "short-circuit the class action process" and "prevent a putative representative from reaching the certification stage." Therefore, the plaintiff should be allowed to seek class certification, which if granted, should relate back to the date of the filing of the complaint.  

The Supreme Court granted certiorari and observed that because Symczyk had conceded in prior pleadings that an offer of complete relief will generally moot the plaintiff's interest in the outcome of the litigation, it was procedurally bound by the Third Circuit's conclusion that Genesis' Rule 68 Offer of Judgment mooted Symczyk's individual claim. As Symczyk no longer had an individual claim, the collective action could not survive. Unless others have come forward to participate in the litigation, and actually opted into the class, nothing survives the satisfaction of the plaintiff's claim.

While the Court did not answer the crucial question of when an offer of judgment operates to moot the plaintiff's individual claim, the decision at least provides employers with a litigation strategy to attempt to end FLSA litigation. If a class has not yet been certified, a defendant may still argue that offering the named plaintiff all the relief individually sought through an offer of judgment moots the entire case and ends a potentially lengthy and costly FLSA collective action. There are some important limitations to note: (1) to even make this argument, the offer must be made before the conditional certification of the class; (2) other employees are not barred from later bringing their own claims in subsequent suits; and (3) the offer must satisfy all the plaintiff's claims and provide every form of relief sought.

POSTED BY SCOTT T. SILVERMAN ON APRIL 1, 2013

According to the report, during 2012, the division’s Tampa office conducted more than 80 investigations of restaurants, resulting in nearly $500,000 in minimum wage and overtime back wages, as well as additional liquidated damages and civil money penalties, for more than 800 employees. The report cautions that investigators from the division’s Tampa District Office will continue to make unannounced visits to full-service restaurants to assess compliance with all labor standards. During 2012, the most common violations found included: requiring employees to work exclusively for tips, without regard to minimum wage standards; making illegal deductions from workers’ wages for walkouts, breakages and cash register shortages, which reduced wages below the required minimum wage; and incorrectly calculating overtime for servers based on their base rate before tips, instead of the correct minimum wage. 

The report states that, during 2013, if violations are found, the division will pursue back wages, civil money penalties and liquidated damages.  This is a more aggressive approach than  in the past, when, although liquidated damages are a statutory remedy, only back wages would be sought to resolve violations. 

Florida employers should bear in mind that although the FLSA minimum wage for non-exempt employees is $7.25 per hour, the Florida minimum wage is $7.79 per hour. However, employers of "tipped employees," who meet the eligibility requirements for the tip credit under the federal Fair Labor Standards Act (generally, they are able to keep all their tips and receive more than $30 per month in tips), may pay such employees a different direct wage. Such employers are allowed to claim a "tip credit" toward fulfilling the minimum wage requirements, whereby tips satisfy a part of the employer's obligation to meet the minimum wage. The direct wage that must be paid to "tipped employees" is calculated as equal to the minimum wage ($7.79) minus the tip credit allowed under Florida law ($3.02), which equates to a direct hourly wage of $4.77 as of January 1, 2013. This is an increase from $4.65 per hour in 2012. If an employee’s tips combined with the employee’s direct wages do not equal the minimum wage, the employer must make up the difference. Employers also are required to provide employees notice of the tip credit provisions and to maintain accurate time and payroll records. Finally, employees must be compensated at time and one-half their regular rates of pay for hours worked beyond 40 per week

Given the increase in enforcement initiatives and penalties, it is especially important for restaurants, as well as all employers, to ensure compliance with the requirements of wage and hour law.

POSTED BY SCOTT T. SILVERMAN ON FEBRUARY 14, 2013

In Moore, delivery truck drivers brought an overtime wage lawsuit.  During the pendency of that litigation, they were terminated.  Thereupon, they brought a second suit, alleging that their terminations were in retaliation for their overtime claims.

The truck drivers prevailed at trial on their retaliation actions, but the court declined to award liquidated damages (which are an equal amount of  proven damages as a measure to punish the defendant for violation of the law).  The drivers appealed this aspect of the lower court's ruling, asserting that the award of such damages is mandatory in retaliation cases, absent a showing of reasonable good faith action by the employer, just as it is in overtime and minimum wage actions.

The Eleventh Circuit observed that the plain language of the retaliation statute directed that courts shall impose such relief as may be appropriate to effectuate the purposes of the law; while, in contrast, the overtime and minimum wage statute stated that courts shall impose an additional amount as liquidated damages.  Thus, the imposition of liquidated damages was clearly meant by Congress to be discretionary.

Therefore, the Eleventh Circuit concluded that the award of liquidated damages, as well as any other damages for retaliation is discretionary upon a determination of whether doing so would be appropriate under the facts of the case.

The important point for employers is to establish facts that would make an award of damages inappropriate. Employers must be ready to defend any actions taken against employees who have made FLSA complaints.  If an employer can show that it had reasonable grounds for the action, apart from asserted retaliation for protected activity, the employer may be able to avoid damages.  Documentation of the legitimate, non-retaliatory reasons for the adverse employment action is, of course, critical.

POSTED BY RICHARD D. TUSCHMAN ON NOVEMBER 19, 2012

On January 2, 2013, Broward's new wage ordinance goes into effect.  Originally titled "Wage Theft," the ordinance, codified at Chapter 20 ½ of the Broward County Code of Ordinances, is now called "Non-Payment of Earned Wages."  Regardless of its name, business groups vigorously opposed the ordinance, claiming it was unnecessary and duplicative of existing laws.  They were right.  But for those very reasons, I believe the new ordinance will be infrequently used and should not be of great concern to local businesses. 

Existing law already provides a financial incentive to attorneys to take even low-dollar wage cases to court.  The federal Fair Labor Standards Act ("FLSA") entitles employees who prevail in a minimum wage or overtime lawsuit to recover their attorneys' fees.  A separate Florida statute, section 448.08, allows employees who prevail in any action for unpaid wages to recover their attorneys' fees.  Thus, even employees who are exempt from minimum wage and overtime laws but who are denied wages owed to them under an agreement with their employer can recover their attorney's fees if they prevail.  

Because of these financial incentives and a cadre of attorneys who specialize in unpaid wage cases, South Florida leads the nation in wage-related lawsuits.  And each year, the number of new cases seems to grow.   

Will Broward County's wage ordinance significantly accelerate this trend?  Based on my reading of the ordinance, it seems unlikely.  The remedies under the ordinance are no greater than what's available under existing laws.  Under the ordinance, employees can recover their back wages and an equal amount in liquidated damages – precisely what the FLSA provides.  If the employee hires an attorney and prevails, he can also recover his attorney's fees.  But again, that's no different than what existing state and federal law already provides. 

And the ordinance actually gives attorneys a disincentive to use it:  Before filing a complaint, the employee must first notify the employer in writing of the wage deficit and give the employer 15 days to remedy the problem.  If an attorney employs this procedure on behalf of his client, and the employer pays the employee, no case can be filed and the attorney cannot recover his fees.  

At the same time, the ordinance makes it easy for employees to proceed pro se.  For example, the ordinance does not require the payment of a filing fee.  And to initiate a case, the employee need only file a written complaint; the County is responsible for serving the complaint upon the employer.  

In short, the Broward County ordinance seems to offer no additional incentive over existing law for attorneys to file wage-related lawsuits.  If the ordinance results in additional wage cases being filed, it seems likely that such cases will be filed by employees, not by attorneys.  If so, that may actually be good news for employers. When wage-related lawsuits settle, as they almost always do, a significant portion of the settlement typically consists of attorney’s fees.

POSTED BY RICHARD D. TUSCHMAN ON OCTOBER 10, 2012

In the meantime, employment lawyers in the Eleventh Circuit should be aware of a recent case decided under the Fair Debt Collection Practices Act ("FDCPA") that appears to answer a related question that has been brewing in the Eleventh Circuit since the court's 2011 decision in Dionne v. Floormasters (11th Cir., July 28, 2011): whether an offer of full monetary relief to a plaintiff, without an offer of judgment, moots the case and deprives the plaintiff of an award of attorney's fees and costs. The Eleventh Circuit's decision In Zinni v. ER Solutions, Inc. (11th Cir., August 27, 2012), signals that the answer is no. 

In Dionne, the Eleventh Circuit held that an employer who denies liability in an overtime case is not liable for the plaintiff's attorney's fees under 29 U.S.C. § 216(b) if the employer tenders the full amount of overtime pay claimed by the plaintiff (without making an offer of judgment) and moves to dismiss on mootness grounds, where the employee has conceded that the claim for overtime should be dismissed as moot. Under such circumstances, the court held, dismissal of the employee's complaint, without an award of attorney's fees and costs, is not erroneous under §216(b) because the district court has not awarded judgment to the employee as the prevailing party.  As the court noted, "[t]he FLSA plainly requires that the plaintiff receive a judgment in his favor to be entitled to attorney's fees and costs."  Thus, Dionne seemed to suggest that a defendant could moot an FLSA case and deprive the plaintiff of an award of fees and costs at any stage in the case merely by tendering full payment to the plaintiff.  However, on January 13, 2012, the Eleventh Circuit issued a revised decision in Dionne with  a new footnote 5 that stated that its holding applied only to the situation where the employee "conceded that his claim should be dismissed before trial as moot."  "It should not be construed," said the court, "as authorizing the denial of attorney's fees, requested by an employee, solely because an employer tendered the full amount of back pay owing to an employee, prior to the time a jury has returned its verdict, or the trial court has entered judgment on the merits of the claim."

In Zinni, the court appears to have come full circle.  The court held that the defendant's settlement offer, while purporting to offer full relief, did not moot the case because it did include an offer of judgment against the defendants.  Though the case was decided under the FDCPA, the court cited approvingly to the Fourth Circuit's decision in an FLSA case, Simmons v. United Mortg. & Loan Inv., LLC, 634 F.3d 754, 766 (4th Cir. 2011), in which the court found under similar facts that the case was not mooted merely by an offer of full monetary relief. 

In short, it now appears that in the Eleventh Circuit, an offer of full monetary relief in an FLSA case, without an offer of judgment against the defendant, will not moot the case. An offer of full monetary relief with a corresponding offer of judgment will moot the case, but will also entitle the plaintiff to his fees and costs as the prevailing party.  And that may be the final word on the matter – at least until the Supreme Court issues its decision in Symczyk.

POSTED BY DEBORAH A. CATALANO ON OCTOBER 3, 2012

Recruiters may or may not be exempt from the payment of overtime under the Fair Labor Standards Act, depending on their specific job duties. One employer recently settled three collective actions brought by medical recruiters in Betancourt v. Maxim Healthcare Services, Inc., No. 1:10-cv-04763 (N. D. Ill. 2010).  The recruiters are expected to receive $12.3 as a result of the settlement; and the fee award for their lawyers may be up to $4.3 million. 

Employers typically attempt to characterize recruiters as exempt under: (i) the Executive Exemption; (ii) the Administrative Exemption; and/or (iii) the Outside Sales Exemption.  In Goff v. Bayada Nurses, Inc., 424 F.Supp.2d 816 (E.D. Pa. 2006), a former supervisor of nurses employed by a provider of in-home nursing care sued for overtime.  The plaintiff admitted in her deposition that "her specific responsibilities included scheduling, monitoring her caseload, facilitating, supervising, evaluating field staff performance, helping with interviewing, hiring, salary determinations and terminations."  Id. at 819.  

Marketing and Human Resources work performed by recruiters was deemed to be exempt work under the Administrative Exemption in Goff.  The court agreed with the employer that the recruiters' "direct role in managing and dealing with customers to ensure that standards were met" satisfied the requirement that the employee be involved with the general operation of the business and, thus, rendered the employee exempt from overtime"  Id.  See also Andrade v. Aerotek, Inc., 700 F.Supp.2d 738 (D. Md. 2010)(Aerotek defended overtime claim by recruiters, showing they performed work which was administrative in nature). 

An employer successfully relied on the Outside Sales Exemption to avoid an overtime claim in Stevens v. Simplexgrinnell, LLP, 190 Fed. App'x 768, 2006 WL 1914247 (11th Cir. 2006).  The employee sold maintenance contracts for indoor sprinkler systems.  In her deposition, she admitted that she spent less than 20% of her time on non-sales activities. She also testified that she earned commissions for the sales she made during service calls to existing customers.  Id. at *2-3 (employee testified that "her salary and job performance depended on her ability to make sales.")  

In order to maximize the likelihood that a court will uphold an exemption, an employer should take the following steps:

1. Draft a job description which stresses the primary duties of the position, including the percentage of time anticipated to be spent on certain tasks such as sales, management, or interacting with client companies, as well as freedom from supervision. 

2. Regularly conduct performance evaluations that are drafted to highlight the exempt nature of the work performed by the employee.  Performance evaluations have been used by employers to defeat overtime claims.  See Mims v. Starbucks, Inc., 2007 WL 10369 (S.D. Tx. 2007)(Starbucks rated managers on leadership skills and traits and store revenue). 

3. Provide self-evaluations to exempt employees at the same intervals as performance evaluations. Employee self-evaluations are helpful in the defense of wage and hour claims.  In Goff, the court noted, that the plaintiff acknowledged in her self-evaluation form that her "main function" was to "oversee all caseload management activity."  Id. at 821.  

POSTED BY RICHARD D. TUSCHMAN ON OCTOBER 1, 2012

A private sector client recently asked me if the company could permit "comp time" -- allowing nonexempt employees who work overtime to take compensatory time off at a later date rather than receive overtime pay at one and one-half their regular rate of pay.

The short answer is no, the Fair Labor Standards requires nonexempt employees in the private sector to be paid overtime when they work more than 40 hours in a workweek.  The FLSA does permit comp time in the public sector, but not in the private sector.  In recent years legislation has been proposed that would change that, but none of these bills has been enacted into law. 

There is a longer, more nuanced answer to the question of whether a private sector employer can use comp time.  The Department of Labor, in its Field Operations Handbook, describes a "time off" plan under which an employer may use a version of comp time within the same pay period. See Field Operations Handbook, §32j16b.  In a 1968 opinion letter, DOL explained that "it is permissible for the employer employing one at a fixed salary for a fixed workweek to lay off the employee a sufficient number of hours during some other week or weeks of the pay periods to offset the amount of overtime worked (i.e. at the time and one-half rate) so that the desired wage or salary for the pay period covers the total amount of compensation, including overtime."  Wage & Hour Op. Letter, 1968 WL 168369 (Dec. 27, 1968).  For example, if the employer has a two-week pay period, and an employee works 10 hours of overtime in week 1, the employer could give the employee 15 hours of time off ("comp time") in week two while paying the employee his or her regular salary for each workweek.  

A few courts have opined that "time off" plans are legitimate. See, e.g., Coover v. Summit County, Civ. No. 86–F–12.1986 WL 28915 (March 21, 1986) ("As a general proposition, time off plans are valid under FSLA."). However, if a plaintiff's lawyer were to challenge a "time off" plan, it is possible that a court could reject the DOL's position and determine that "time off" plans are impermissible because they are not specifically authorized by the FLSA.  Another problem with such plans is that "comp time" must be used within the same period; it cannot be carried over into a subsequent pay period. Thus, a "time off" plan is of limited utility.  

Whatever the reasons, few employers have adopted "time off" plans.  The vast majority of employers follow the safe approach and pay non-exempt employees a cash payment of overtime, at one and one-half the employees' regular rate, for each workweek in which the employees work more than 40 hours.  Any system in which a private sector employer allows nonexempt employees to "bank" their overtime to be used as comp time in subsequent pay periods is impermissible under the FLSA and may result in liability.

POSTED BY DEBORAH A. CATALANO ON SEPTEMBER 28, 2012

Wage and hour lawsuits have risen drastically in recent years. The cost of defending such lawsuits has also greatly increased because many wage and hour lawsuits at both the state and federal levels involve class, collective, or multi-plaintiff actions. An example of a recent case in which a Texas federal judge dealt a blow to a developer by allowing a group of salespersons to proceed together as a class is Edwards v. KB Home, 3:11-cv-002420 (S.D. Tx. Sept. 25, 2012). The difficulty for KB Home started in 2011 when forty (40) current and former on-site salespeople filed a collective action - claiming they were improperly denied overtime pay because KB Home had misclassified them as exempt. The evidence showed that KB Home had treated the salespersons as a "homogenous group" and based the denial of overtime on the Outside Sales Exemption. While the Outside Sales Exemption is a proper basis for avoiding overtime pay when applied correctly, it apparently was not done so in this case. 

The Outside Sales Exemption is found in 29 C.F.R. §541.500(a) which provides that an employer can avoid the payment of overtime to a salesperson if two criteria are met: (i) the employee's "primary dut[y] is to make sales, or obtain customers' order or contracts for services or for the use of facilities," and (ii) the employee "customarily and regularly perform these duties away from the employers' place of business." As a general rule, in order to claim an employee is exempt under the Outside Sales Exemption, an employer should ensure that at least 80% of the employee's time is spent generating sales. Work that furthers the employee’s sales efforts, such as writing sales reports and planning itineraries, is counted as time spent generating sales. 29 C.F.R. § 541.500(b). Secondly, the employer must show that the employee regularly performed work away from the employer's place of business. If an employer cannot demonstrate these criteria, it would likely be in a position similar to KB Home, with the court allowing a class of employees to proceed in an unpaid overtime case. 

Not surprisingly, it is more challenging for employers to defend overtime claims where multiple plaintiffs are in one case. To minimize the risk of the outcome KB Home experienced this week, it makes sense for employers to obtain a legal review of any positions they designate as exempt from the payment of overtime. 

POSTED BY SCOTT T. SILVERMAN ON JUNE 21, 2012

In Christopher, et al. v. SmithKline Beecham Corp., d/b/a GlaxoSmithKline, No. 11-204 (June 18, 2012), the Supreme Court held that pharmaceutical sales representatives qualify for the "outside salesman" exemption to the Fair Labor Standards Act and are, therefore, not entitled to overtime compensation for hours worked over 40 in a workweek.  Because representatives do not actually sell prescription drugs, but merely try to convince physicians in their assigned territory to write prescriptions in appropriate cases (a process called "detailing"), Plaintiffs argued that the outside sales exemption did not apply to them.  The DOL agreed and submitted an amicus brief, which argued that the exemption only applies where the employee actually transfers title to the property in question.

The Supreme Court disagreed with the DOL and affirmed the grant of summary judgment to Defendant. The Court held that deference was not required to the DOL position, because it amounted to "unfair surprise" in light of the longstanding industry practice of treating detailers as exempt and the massive amount of liability sought, and opined that the DOL stance was unpersuasive, because it was reached without public input and was contrary to the language of the FLSA.  The Court then focused on a functional inquiry of whether  the work of the detailers should qualify as sales, and found that the nonbinding commitments to prescribe drugs that the detailers obtained from physicians amounted to an "other disposition" of the property, in the context of the peculiar regulatory environment of the industry, so as to fall within the FLSA definition of sales.  In addition, the Court reasoned that the purpose of the FLSA exemption would be met by applying it to the pharmaceutical sales detailers, because the FLSA assumes that exempt employees earn well above the minimum wage, perform work that is difficult to standardize to a particular timeframe, and engage in activities that cannot be easily spread to other workers. The salesmen were not the type of workers that the FLSA was enacted to protect.

Three important points arise from this opinion for all employers: 1. because the DOL is expected to recognize the Court's criticism, employers must remain vigilant in staying abreast of the latest DOL interpretations applicable to their industry; 2. in deciding whether an exemption applies, courts should employ a functional, rather than formulaic, analysis, which will allow employers in exemption cases to argue the particular realities applicable to their industry; and 3. defendants' arguments that the employees in question are paid well above the minimum wage,  do not have a set work schedule and perform functions that cannot be assigned to other workers are entitled to careful consideration by a court when ruling on any exemption issue.

POSTED BY SCOTT T. SILVERMAN ON JUNE 12, 2012

In Mortgage Bankers Association v. Solis et al., Case No. 1:11-cv-00073 (D.D.C. June 6, 2012), U.S. District Judge Reggie B. Walton ruled that the Department of Labor ("DOL") lawfully acted within its discretion when, in 2010, it stated that mortgage loan officers are not generally exempt from overtime pay. Judge Walton held that the DOL did not violate the Administrative Procedures Act ("APA") when it withdrew a 2006 opinion letter, which had suggested that mortgage loan officers were covered by the administrative exemption to the FLSA. The 2010 interpretation concluded that because loan officers' primary duties focus on sales, they do not perform the administrative work necessary for the exemption.

The lawsuit argued that, under the APA, the DOL was required to give notice of its intent to change policy, and provide interested parties an opportunity to comment, before switching positions. Judge Walton disagreed, reasoning that such a requirement only applies where there has been substantial and justifiable reliance on the agency interpretation, but the prior opinion letter had been written in 2006, just four years before the new interpretation in 2010.  Further, the Association had argued that its members could assert a "good faith" defense to liability and damages based on the 2006 letter, which, according to the Court, negated detrimental reliance.  Finally, Judge Walton found that  the DOL's position was not arbitrary, capricious or an abuse of discretion.

This decision clarifies any open question as to whether mortgage loan officers may be categorized as falling under the administrative exemption to the FLSA.  Typical loan officers, whose primary duties involve sales, cannot be categorized as exempt, unless they meet the test for the outside salesman or other exemption.

POSTED BY SCOTT T. SILVERMAN ON MAY 11, 2012

With the summer almost upon us, private, for-profit companies may be thinking of high school or college students as a resource for unpaid labor, through "summer internships."  This is almost always unlawful!

According to the Department of Labor ("DOL") Fact Sheet, internships in the “for-profit” private sector will most often be viewed as employment, unless a six-factor exclusion test is met.  Interns in the “for-profit” private sector who qualify as employees must be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek. The determination of whether an internship program meets the exclusion depends upon all of the facts and circumstances. However, the DOL states that the employer must meet all six criteria to exempt interns from payment, and that the exclusion is "quite narrow":

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

In the unlikely event that an employer decides  that its program  meets this test, it must have a document for the student to sign, which should replicate the six factors and include the intern's acknowledgement that the position is an unpaid internship. The document should also specify the ending date of the experience.

In the more likely scenario that the summer hire qualifies as an employee, the employer would simply follow its normal hiring procedures.  However, it is vital that the employer include a written acknowledgement that the work is only for the summer and the employment position will terminate on a date certain.

POSTED BY KAREN M. BUESING ON APRIL 9, 2012

Employers should welcome the new amendments to Florida's unemployment compensation laws. Among other things, those amendments eliminate the provision that the unemployment compensation law is to be liberally construed in favor of the claimant, broaden the definition of "misconduct" which will disqualify a claimant from receiving benefits, and require claimants to take new steps to demonstrate efforts to find work.  "Misconduct" now covers certain conduct regardless of whether it takes place in the workplace or during working hours. It now specifically includes conduct demonstrating a "conscious" (rather than "willful") disregard of an employer's interests, carelessness or negligence that manifests an intentional disregard of those interests, chronic absenteeism or tardiness,  or a violation of an employer's known, valid and consistently enforced rule.

Prior to the amendments, claimants could receive unemployment compensation even though they were also receiving severance from their employer. Now, that severance will reduce the amount of unemployment compensation claimants receive. Further, the evidentiary burden for unemployment compensation hearings is relaxed under the new amendments – hearsay may now support a finding of fact if the party against whom it is offered has a reasonable opportunity to review it prior to the hearing and the hearing officer determines that it is trustworthy, probative and in the interest of justice to admit the evidence.

These are exciting changes for employers long frustrated by the unemployment compensation process. We are pleased to have the Hon. Alan O. Forst, Chairman of the Florida Unemployment Compensation Appeals Commission join me in a discussion of how these changes are playing out in the field at the 17th annual Akerman Labor & Employment  Law Seminar in Hollywood, Fla. on Thursday April 19. We hope you will join us. To learn more please visit http://www.akerman.com/events/LELS12/overview.asp

POSTED BY SCOTT T. SILVERMAN ON FEBRUARY 21, 2012

On February 16th  the Commerce and Tourism Committee of the Florida Senate reported favorably on a bill that would allow Florida employers to fundamentally alter the way that tipped employees are paid.  Senate Bill 2106 is now before  the Regulated Industries Committee.  The text of the bill is available here.  

Currently, the Florida minimum wage for employees is $7.67 per hour.  However, Florida law allows employers of tipped employees to take what is called a “tip credit” against wages of up to $3.02.  Employers who take the tip credit must pay tipped employees a direct wage of $4.65, which is equal to the minimum wage ($7.67) minus the applicable tip credit ($3.02).

The Federal Fair Labor Standards Act (FLSA) requires employers of tipped employees to pay a direct wage, which is equal to the federal minimum wage ($7.25) minus the federal tip credit ($5.12), or a direct hourly wage of $2.13 per hour.
  
Under Senate Bill 2106, Florida employers of tipped employees would have the option of not paying a direct hourly wage of $4.65.  Rather, employers could elect to pay a guaranteed wage for such tipped employees, equal to at least 130 percent of the state minimum wage, rounded up to the next cent (or $9.98 an hour).

If the employer makes the election, the employer would be deemed to have met the requirement to pay the Florida minimum wage, but would still be required to meet the requirements of the FLSA.  Thus, the employer would still have to pay a direct hourly wage of $2.13 per hour.  The employer would then be required to make up any failure of the combination of the $2.13 direct hourly wage and actual tips to equal the guaranteed compensation of at least $9.98 per hour.

If the employer failed to pay the guaranteed wage in the notice or engaged in retaliation against an employee, the employer would be liable for the unpaid wage, and an equal amount as liquidated damages and fees and costs.

Employers of tipped employees should stay abreast of developments in this area.

POSTED BY ANDREW LOEWENSTEIN AND SCOTT T. SILVERMAN ON AUGUST 4, 2011

As many employers know, the Fair Labor Standards Act (”FLSA”) requires most businesses to pay their employees the federal minimum wage, as well as time-and-one-half their regular rate for hours worked in excess of forty (40) per week. The FLSA provides that the prevailing party is entitled to attorneys’ fees. The FLSA therefore tends to be a fee-driven statute, because the amount of attorneys’ fees sought by a plaintiff typically exceeds the amount of any overtime actually owed. However, is it possible for an employer to resolve the employee’s claimed damages without having to pay the attorney’s fees sought by the employee’s counsel?

In a recent victory for employers, the United States Court of Appeals for the 11th Circuit said “yes,” finding that an employer who tenders the entire amount of overtime damages claimed by the employee prevents an FLSA plaintiff from collecting his or her attorneys’ fees. That case, Dionne v. Floormasters Enterprises, Inc., —F.3d.—, 2011 WL 318977 (July 28, 2011) (11th Cir. 2011), provides powerful leverage for employers against FLSA litigation..

Therefore, where an employer denies liability, but tenders payment of the entire amount of the FLSA wages clamed by a plaintiff, the employer will be able to dismiss the plaintiff’s lawsuit as mott and avoid liability for payment of the plaintiff’s attorneys’ fees. Of course, even prior to litigation, employers may moot a FLSA claim and deter a lawsuit for damages and fees by offering to pay the entire amount claimed to be owed. Employers should keep in mind their new leverage in addressing FLSA claims.

POSTED BY SCOTT T. SILVERMAN ON JANUARY 21, 2011

On December 13, 2010, the Wage and Hour Division of the Department Labor announced an “Atttorney Referral System” that it will maintain with the American Bar Association. When FLSA or FMLA charging parties are informed that the Wage and Hour Division is not pursuing their complaint, they will be given a toll-free number to contact a newly created “ABA-Approved Attorney Referral System.” In addition, according to the DOL, the Wage and Hour Division will provide “relevant information and documents” to the charging parties and their attorneys.

What this means, of course, is that potential plaintiffs will be given easy access to FLSA attorneys. In addition, plaintiff’s attorneys will be able to obtain all the material that the DOL has gathered in its investigation. This will result in even further FLSA and FMLA lawsuits against employers.

Employers should take this opportunity to have their FLSA and FMLA policies and practices reviewed to ensure compliance with the law. No employer wants to be in the position to have a case referred to an attorney through the DOL.