Miami-Dade Has New Wage Theft Ordinance

Miami-Dade has become the first county in the nation to adopt a countywide wage theft law, and hopefully it will not be the last. The Ordinance, which became effective on March 1, 2010, applies to private sector employees and employers, prohibits wage theft, and provides administrative procedures and private causes of action. An employer found to be in violation of the wage theft Ordinance will be required to pay the actual administrative processing and hearing costs as well as restitution to the employee, which would include back wages owed as well as liquidated damages of double that amount and possibly treble damages.

What this means for employers in Miami-Dade County is that a simple oversight or misunderstanding regarding which employees can be classified as exempt or as independent contractors under the Fair Labor Standards Act ("FLSA"), may now lead to a finding that the employer has committed "wage theft."

According to a report from the Office of Commission Auditor, which accompanied the Ordinance, for the past five years the Southern District of Florida (the federal trial court with jurisdiction over Miami-Dade County) has had a disproportionately high number of FLSA cases filed. Nevertheless, the summary that accompanied the Ordinance reflects the Commission's belief that the requirement for employees to opt-in to a FLSA class action lawsuit hampers their ability to seek remedial action in courts. Thus, the summary states that the Ordinance "is intended to be a tool to root out violations of U.S. labor laws occurring in Miami-Dade County."

According to the Ordinance, a "wage theft violation" occurs when an employer fails to pay any portion of the wages due to an employee, according to the wage rate applicable to the employee, within a reasonable time from the date on which that employee performed the work for which the wages are compensation. The Ordinance defines reasonable time as no later than 14 calendar days from the date the work was performed; however, this time may be modified to no longer than 30 days by an express agreement between the employer and employee that has been reduced to writing and signed by the employee.

The Ordinance defines wage rate as "any form of monetary compensation which the employee agreed to accept in exchange for performing work for the employer, whether daily, hourly, or by piece." Thus, this provision could be interpreted more broadly than the employee's "regular rate" under the FLSA. Once an employee brings a timely claim that wage theft has occurred, the accused employer will have to defend itself before a county-appointed hearing examiner.

The Ordinance does not set out requirements or qualifications a person must possess to be appointed a hearing examiner; thus, it is possible the hearing examiner may not be a judge or attorney or have a background in labor and employment law. The mechanics of the hearing, as set out in the Ordinance, will be like a trial, including discovery in accordance with the Florida Rules of Civil Procedure. Employers will have to be very careful with this process because an employee can choose at any time to stop the proceedings under the Ordinance and file a civil action in State or Federal Court (for violation of state or federal wage/hour laws, which would likely be the basis for the wage theft allegation).

Also, should a hearing examiner find the employer in violation of the wage theft Ordinance, the hearing examiner can award damages of up to three times the amount of the unpaid wages.

Employers' Bottom Line: Employers in Miami-Dade County need to be more vigilant than ever to ensure that employees are properly classified and promptly paid for all work performed. A stringent review of employees currently classified as exempt or as independent contractors, conducted at the direction and supervision of experienced employment law counsel, is recommended to ensure complete compliance with the FLSA.

Employers should also set out in writing when wages will be paid and have the employees sign this written timeline of payments. (Note that the Ordinance only permits the employer to extend the time for payment of wages to up to 30 days from the date the work is performed and then only with the written agreement of the employee.) Additionally, employers will need to review their time keeping polices and make sure that accurate time records are being kept and that all time worked by employees is being recorded. While most employers only keep time records for nonexempt employees, it may be prudent to require exempt employees to do so as well. If a hearing officer determines that an employee is improperly classified as exempt, the employer will have the burden of proving actual time worked. Without accurate records, the employee can estimate the time and the hearing officer will base the wage calculation on that estimated time.

Five Laws That Protect You During Layoffs

Being laid off is an emotional event that can leave you feeling wronged. Knowing the difference between an illegal layoff and an unfair layoff can help you decide whether to fight or move on.

"It's difficult for employees to see layoffs from an objective perspective," says Marilyn Conyer, vice president of Accord Human Resources, an Oklahoma City HR consulting firm. "Many times when employees lay out the facts of a layoff, we don't think it's fair either, but there's nothing illegal about what the company did."

Employment in most states is "at will," meaning you can quit or the company can fire you without cause. However, companies still have to follow federal and state employment laws covering issues such as discrimination, whistleblowing and layoff notices.

Five major federal laws protect laid-off employees. States have their own laws about employment, so to be sure your layoff wasn't illegal, check with a local attorney.

Discrimination Laws

How can you tell if your layoff was discriminatory? Consider all the reasons you were laid off, says Sarah Beth Johnson, an attorney at Fox Rothschild LLP in Atlantic City. If there's even one other explanation for why you were let go, the discrimination charge likely won't stick.

"If you're the worst employee ever and you're older, that's not enough," she says. "It really has to be that you were told you're too old for the job, or you're a black woman who can point to a white male who's your peer in every way and you got laid off and he didn't."

It is legal to lay off a highly paid older worker. "If I can fire you and hire two people for your salary who do twice the work, I'm allowed to do that," Johnson says.

If you think discrimination played a part in your layoff, contact a lawyer or the Equal Opportunity Employment Commission (EEOC). The EEOC will listen to your story, question your former employer, make a finding and issue a right-to-sue letter you can take to an attorney, Conyer says. You can sue regardless of whether the EEOC finds in your favor.

Federal laws that prohibit discrimination include:

* Title VII of the Civil Rights Act of 1964, which prohibits companies from making employment decisions based on race, religion, sex (but not sexual orientation), pregnancy or national origin, explains Neil Patrick Parent, an attorney with Reavis Parent Lehrer LLP in New York City. * Title I and Title V of the Americans with Disability Act of 1990, which prohibit employment discrimination against those with disabilities.

* The Age Discrimination in Employment Act of 1967, which protects workers 40 and older.

* The Older Workers Benefit Protection Act, which covers workers over 40 caught in a group layoff. The law gives you extra time to consider any severance waiver your employer offers and a week to change your mind after signing a waiver.

Big Company Layoffs

If your employer is large, The Worker Adjustment and Retraining Notification Act, which sets rules for notifying workers about large layoffs and plant closures, may cover you.

Handbooks, Severance Not Binding

Employee handbooks typically cover layoffs, severance, pay for unused vacation and your duty to return company equipment, Johnson says.

However, an employer can change the rules and then do a layoff under the new rules. "If an employer has reserved the right to change [the handbook] -- and most do that -- they can change it," says Karen McLeese, vice president of CBIZ, a Kansas City, Missouri, HR consulting firm.

A company can also say it's broke so no one gets severance. "Severance [is] an unsecured promise to pay unless they've funded it into a trust," McLeese says.

Severance Releases

When severance is offered, you may have to sign a waiver releasing the company from future claims. When helping clients decide whether they should sign, Julia Murphy, an attorney with Outten and Golden LLP, a Stamford, Connecticut, firm that represents only employees, discusses the circumstances surrounding the layoff.

"Why were you picked? Did they eliminate your whole department? Do you feel like you're being singled out because you just had a baby or took a disability leave?" she says. If you want to fight the decision or ask for a better severance package, "that's when you need some legal leverage, and that comes from the facts surrounding the termination," she says.

Layoff Lawsuits

Even if you were illegally laid off, it may be tough to pursue your case in court. Johnson warns: If your salary was low, finding an attorney willing to take your case may be difficult.

A lawsuit found in your favor could result in back pay, damages and attorneys' fees. However, those come with a cost. "You have to have the stomach for litigation," Johnson says. "It will take two to four years, unless you have slam-dunk evidence."

During the litigation process, be prepared to talk about topics like your work history and whether you've ever been convicted of a crime. If you claim emotional distress, your medical records will be brought up. Claim lost income, and your employer's attorney will get to see your tax return and your spouse's return, Johnson adds.

In the end, an attorney can tell you whether your layoff appears to be legal or illegal, but only you can determine whether the cost of going after your former employer is worth the effort it will take.