Overtime Claim Defense
It’s not unusual that an employee claims they weren’t compensated for the amount of time they worked. However, sometimes these claims can be false or unfounded.
A common challenge many employers face is proving that the employee didn’t work the amount of time they claim. Any employee can file a complaint with the Wage and Hour Division of the Department of Labor (DOL), claiming that an employer failed to meet their obligations under the Fair Labor Standards Act (FLSA). However, the law places the burden on the employer to prove that the allegations of the employee are, in fact, false.
The Fair Labor Standards Act (FLSA) is a federal law that requires certain employees to receive overtime pay when they work more than 40 hours in a workweek. Overtime is working more than 40 hours a week. Therefore, paying an employee for 80 hours and no overtime would violate the FLSA and overtime rules even if the employee worked 42 hours the first week and 38 hours the second week.
FairLaw Firm has significant experience in defending companies and their owners in lawsuits involving the alleged failure to properly pay overtime wages. Our firm frequently appears in court to defend against false or excessive claims for unpaid or underpaid overtime wages by current and former employees.
The FLSA does not require that you receive any notice or warning before being sued, and because the FLSA is a federal law, you could be sued in either a Florida state court or a federal court.
The FLSA allows an employee to sue an employer for the overtime wages that should have been paid. Plus, the FLSA also allows an employee to claim an equal amount (double damages) as “liquidated damages” unless you as the employer can show that you had good faith and reasonable explanation for not timely paying these overtime wages. This is normally shown by proving that an employer consulted with an employment attorney who gave a reasonable opinion about the issue.
The FLSA requires (by including the term “shall”) a Court to award an employee who wins a case for overtime pay their attorneys’ fees and costs. This means that lawyers are rewarded for filing lawsuits to recover overtime pay. As long as the employee recovers overtime wages, the employee’s attorney is going to get paid by the employer who is liable for the unpaid or underpaid overtime wages.
FLSA overtime lawsuits can get extremely expensive for this reason, because you are not only responsible for paying your own attorney to defend you, plus any overtime wages, and liquidated damages, but you also are going to have to pay the employee’s attorney. Unfortunately, it is very rare that you would be able to recover your attorneys’ fees from the employee if you win the case, and you cannot normally sue the employee just for suing you.
The FLSA only applies to employees; it does not apply to independent contractors. The FLSA uses what has been called the broadest definition of employee around. Paying someone as an independent contractor, paying a one-person company as an independent contractor, and having someone sign an agreement that they are an independent contractor does not decide whether someone is or is not an independent contractor or an employee. The test used to figure out if someone is an employee or an independent contractor uses many factors, the most important of which is the extent of control.
Under the FLSA, it’s the employer who has the responsibility to make and maintain accurate records of the hours worked and the pay received by each employee. Employees have the upper hand when there are no or inadequate records, so let FairLaw Firm not only help you with your current situation but also help you avoid a problem in the future.
What Did You Receive?
Companies often call our office after receiving one of three things:
1. Demand Letter From a Lawyer
If you received a demand letter sent by a lawyer for a current or former worker, you have several options: you could ignore it, you could pay the amount demanded, or you could allow us to respond to the letter. You make the decisions about whether, when, and how to respond to that letter. We will use our experience to assist you in formulating that response, but you will ultimately approve the final version of our response before it goes out. Under the law, an employee could still sue an employer who agrees to pay overtime wages or liquidated damages unless the settlement is approved by a court or the Department of Labor; therefore, hiring an experienced employment attorney is important to avoid possibly having to pay twice.
2. A Lawsuit (Summons and Complaint) From a Process Server
If you received a lawsuit, you have about 3 weeks to hire a lawyer who can file a response to it in the appropriate court (20 days in a Florida state court or 21 days in a federal court). The failure to have a lawyer file a timely response to a lawsuit can result in the Court deciding that you cannot present any defenses to the claim(s) alleged by entering a default.
Companies cannot represent themselves in court and cannot be represented by a non-lawyer owner, as Florida law requires that companies be represented by a lawyer in court. The failure of a company to hire a lawyer to defend it in court could result in an employee winning automatically (by default). Upon hiring FairLaw Firm, we will dive into the Court’s file to see what has happened and then defend the case.
3. Letter From a Lawyer You Don’t Recognize
If you received a letter from a lawyer that talks about how your company was sued and that includes a case number, that’s because there are a number of law firms who send solicitation letters to defendants in FLSA overtime wage lawsuits. These lawyers monitor the court filings and send the same letter to every company that is sued for an alleged overtime wage claim. Know that you know you’re being sued (before you are actually served with the lawsuit), do yourself a favor, and take the time to research who you want to represent you and your company.
Who Can Be A Defendant In An Overtime Lawsuit?
The FLSA uses a broad definition of the term “employer” to include not only a company but also individuals. This means that owners, officers, directors, and even managers of a company can be named as defendants – and equally responsible as the company itself – for paying the employee any overtime owed, liquidated damages, and attorneys’ fees and costs.
Is Every Company Required to Pay Overtime Wages?
No. The FLSA does not apply to require that every company pay its employees overtime wages. Companies have to earn at least $500,000 in gross income (before expenses) and have to engage in “interstate commerce” in order to be required to pay overtime under the FLSA.
What Do We Do?
After making sure that we do not have a conflict with representing your company, FairLaw Firm will analyze the materials you received to determine what you received and recommend a course of action. We will ask for you to provide us with the entire personnel file, all time and pay records, all agreements, and all other necessary documents so we can analyze the situation. If you have text, WhatsApp, or other messages, we’ll review them if they deal with the type of work performed, when it was performed, or where it was performed. We will then have a candid discussion with you about the good and the bad. You will understand the worst-case scenario, the best-case scenario, and the range of probable results. With that information, we can discuss how we proceed to represent you. We use our experience to devise a defense strategy that works for you.
Who Will Decide Your Case?
You and the person making the claim get to decide the case until it’s time for a judge, jury, or arbitrator to decide. You will have plenty of opportunities to try and settle the claim before it is time for a judge to decide and then before a jury decides (or before an arbitrator decides). For cases filed in federal court, many of the federal District Judges in the South and Middle Districts of Florida require overtime wage claims to go to a settlement conference before a United States Magistrate Judge.
The settlement conference will be an opportunity to try and settle the case, as the lawyers are allowed to speak directly to the other side, and then the parties decide the outcome – if they settle or not – with the Magistrate Judge assisting in that process. All cases filed in Florida courts are required to go through mediation before they proceed to trial, and mediation is a similar process where the parties get together with their lawyers and a neutral third party to try and settle their case.
Certain overtime cases proceed to arbitration. This happens when your company has its employees (or independent contractors) sign an agreement that requires the arbitration of their claims.
Arbitration is different than a court proceeding because the filings are not public records and because the arbitrator will decide all of the issues in the case (instead of them being split between a judge and jury). Arbitrations of overtime lawsuits often take less time to complete, but they are not free. An employee has to pay a reduced filing fee to initiate arbitration, while an employer has to pay a much higher fee to the arbitrator at the beginning (several thousand dollars) and then pay the arbitrator’s fees as the case goes along.
While an employer can hope to save on attorneys’ fees by the case taking less time to go to completion, an employer will have to pay the arbitrator to get there.
How Much Will This Cost?
FairLaw Firm defends clients in overtime cases on an hourly basis. Our clients pay the firm a retainer, part of which is non-refundable and part of which is non-refundable. We keep track of the time that we spend on your case and then send you bills detailing what we did, the time we billed for doing the work, and how much each task costs.
The cost of defense depends on a lot of factors, but the biggest factor is how much time we are required to spend on your case. Some cases are resolved quickly and do not cost a lot to defend, while other cases require us to spend a significant amount of time due to the amount being claimed and the issues involved.
We have our clients guide us on the type of defense they want to mount and have a candid discussion about the anticipated cost to achieve the desired result.