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Front Page » Top Stories » Ignoring New Wage Law Could Be Costly For Businesses

Ignoring New Wage Law Could Be Costly For Businesses

Written by on May 5, 2005

By Suzy Valentine
Business owners across Miami-Dade County could be exposing themselves to legal costs in tens of thousands of dollars if they disregard a $1 hike in the minimum wage taking effect statewide.

Beginning this week, workers are entitled to be paid at least $6.15 an hour subject to exemptions in certain sectors such as transportation. The rise in the statewide minimum wage from the federally mandated $5.15 follows approval in November by Florida voters.

"If an employee’s underpaid by, say, $1,000," said employment attorney Andrew Rodman of Stearns Weaver Miller Weissler Alhadeff & Sitterson, "he or she could be compensated for the underpayment as well as receiving a further $1,000 liquidated damages – effectively double damages."

That, he said, doesn’t count legal fees.

"The attorney’s fees provision could leave employers liable to pay thousands more," said Mr. Rodman. "A couple of hours of legal work can equate to $1,000."

Before the legislation, 25 to 35 workers sued their employers, according to the daily Miami Federal Report, attorneys said. The docket Wednesday (4/27) showed that of 26 complaints filed, five cited wage and hour grievances – almost 20% of new claims.

"I wouldn’t say it’s typical," said Joe Fleming, an employment attorney at Greenberg Traurig, "but it’s certainly average. Sometimes it’s more."

"There are a growing number of work and hour lawsuits which go through the federal courts," said Mr. Rodman. "I’ve observed there are between five and seven a day. That’s not the whole picture – some people are still filing through state court."

The legislation includes an anti-retaliation clause so employees dismissed for raising a grievance about being underpaid can ask for reinstatement.

Attorneys advised employers to become familiar with the provisions. "To avoid liability, employers should conduct an internal audit of the workplace," said Mr. Rodman.

In August, a number of revisions were made to federal regulations governing salaries. Among them was a boost in the weekly salary from $255 to $455 that would exempt an employee from overtime provisions.

"An employer can’t just award that salary," said Mr. Rodman. "It’s not enough. The individual needs to pass a duties test, too, which looks at issues like level of responsibility and the number of staff overseen."

The hourly rate will change again in seven months.

"The minimum-wage law is pegged to inflation," said Mr. Rodman, "so by Sept. 30, the state will have adjusted the rate that comes into force Jan. 1, 2006."