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To help you identify whether you have an unpaid wages issue in the workplace, we summarize some of the common issues in this area of the law.
A. When Is An Employee Entitled To Overtime Compensation?
The Fair Labor Standards Act (FLSA) is a federal law that governs whether employees are entitled to an overtime premium for overtime hours worked. As a general rule, employees who work over 40 hours in a given workweek are entitled to overtime payment at 1 ½ times their regular rate of pay. By way of example, an hourly employee who is paid $10 an hour is entitled to payment of $15 an hour for every hour worked over 40 in a week. Employees who are paid on a salary basis may also be entitled to overtime compensation if the employee’s position is not of the type the FLSA deems exempt/excluded from the overtime payment obligations. Automatically assuming that a salary employee is not entitled to overtime compensation is a common mistake made by employers. All positions need to be individually analyzed to determine whether the position may be legally excluded from the FLSA’s general overtime payment obligation.
B. Is Overtime Owed To Workers Classified As Independent Contractors Or Otherwise Paid On A 1099 Basis?
Workers who are truly employees but are labeled as independent contractors may be entitled to overtime compensation, even if the workers is paid on a “1099 basis.” Determining whether a worker is an independent contractor or employee requires a complex analysis focused on the facts of the relationship. Employees and employers should consult with an experienced employment lawyer to determine a worker is an employee of independent contractor. Misclassification of employees as independent contractors is a serious and widespread problem, particularly in South Florida. Such misclassification can lead to recovery of substantial amounts of unpaid overtime and other wages by the misclassified employee.
C. What Laws Govern Minimum Wage Requirements?
The FLSA (the same federal law that protects overtime compensation) sets forth rules relating to payment of minimum wage to employees. The federal minimum wage for covered nonexempt employees is $7.25 per hour.
Florida, however, also has its own minimum wage laws. In fact, Florida sets a higher minimum wage than that set by federal law. Florida employers must comply with the state-mandated minimum wage requirements. As of January 1, 2017, the Florida minimum wage is $8.10 an hour.
D. How Does Minimum Wage Work For Tipped Employees?
Under the FLSA, an employer may pay a tipped employee not less than $2.13 an hour in direct wages if that amount plus the tips received equal at least the federal minimum wage, the employee retains all tips and the employee customarily and regularly receives more than $30 a month in tips. If an employee’s tips combined with the employer’s direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, the employer must make up the difference.
A common issue for tipped employees is improper tip pooling. This occurs when an employer requires tipped employees to share their tips with individuals that cannot be a part of a proper tip pool. The existence of an improper tip pool may create a minimum wage problem and entitle employees to significant monetary recovery.
E. How Do Lawyer Fees Work In Cases Of Unpaid Wages?
Unlike some laws that entitle the winning party to recovery of its attorneys’ fees at the end of case, the laws governing unpaid wages generally allow only prevailing/winning employees to recover their attorneys’ fees. For the most part, this means that win or lose, employers must pay the cost of their own lawyers.
When representing employees in unpaid wages litigation, Perera Barnhart generally represents employees on a contingency basis. This means employees are not responsible for payment of our fees unless and until we are able to recover money on their behalf.