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Federal Overtime Laws – 1st in a 3-Part Series

Sat May 5, 2012 Publications

Florida businesses face the highest number of unpaid overtime wage claims in the nation under the federal Fair Labor Standards Act (FLSA).

Lawsuits claiming unpaid overtime against businesses have increased dramatically nationwide, nearly doubling in the past five years. Florida businesses, in particular, received the brunt of this increase. More than 30 percent of all new claims filed in our federal courts were filed in Florida in 2010 – for Florida, nearly one-third of all filings nationwide.

Business owners and managers increasingly are being named personally as defendants, along with their companies, because under certain circumstances they can be held personally liable for unpaid overtime. Today, unpaid overtime litigation is a high-volume, organized practice area for law firms with resources that engage in aggressive multi-media advertising campaigns.

There are several reasons for these increases. Conservative rulings and changes to the law in other types of employment law cases and competition in other practice areas have spurred law firms to seek new areas of revenue. Law firms have focused on unpaid overtime claims, both small and collective, in the hope of seeking attorney’s fee awards that far exceed the wages claimed. Also, the definition of “compensable work” has changed with the increased accessibility of off-duty employees, through improved technology.

The overtime laws are mechanical and counterintuitive, but they apply to nearly every business. Technical violations are not uncommon. Even a minor violation, like the docking of a final paycheck, can subject a business to back pay, liquidated damages, and attorney’s fees. Where there is a violation as to one employee, there is often a violation as to others. And, owners or managers in charge of day-to-day operations can be personally liable.

Businesses must thoroughly understand and comply with the laws to avoid liability. They should review the U.S. Department of Labor Wage and Hour Division website and conduct an internal audit to determine that employees are properly classified as exempt or nonexempt and that nonexempt employees’ hours of work are properly recorded and paid.