California employers, particularly those in the hospitality industry, are facing more wage-and-hour violation claims than ever before. In fact, since 1985, the hospitality industry has the highest number of wage and hour claims under the Fair Labor Standards Act (FLSA). Employers in the business of food services and accommodation should be aware of the types of FLSA claims they may face.
Misclassification of employees
Under the FLSA, employees are classified by their employers as exempt or nonexempt from minimum wage and overtime provisions. Employers who misclassify a nonexempt employee as exempt may face a lawsuit for violating the FLSA.
- Exempt – Exempt employees are generally paid on a fixed salary basis and make a minimum of $35,568 per year (as of 1/1/20). Most exempt employees must fall under have executive, professional, or administrative job duties. Some examples of exempt employees include: physicians, teachers, accountants, and scientists.
- Nonexempt – Non-exempt employees are typically paid on an hourly basis and earn less than $35,568 per year (as of 1/1/20). Nonexempt employees generally have job duties that do not fit in the executive, professional, or administrative categories. Common nonexempt employees include: waitresses, dishwashers, hotel cleaning staff, customer service representatives, and retail associates.
An employer can violate the overtime provisions of the FLSA if it fails to pay its non-exempt employees overtime wages at a rate of one-and-one-half times the employee’s rate of pay for all hours worked over 40 hours per week.
Minimum wage violations
The FLSA requires that as of July 24, 2009, employers are required to pay nonexempt employees the federal minimum wage of $7.25 per hour. Employers are also required to meet state minimum wage requirements. Failure to pay a nonexempt employee minimum wage could constitute an FLSA violation.
Failure to maintain records
The FLSA requires employers to maintain accurate records of the employees’ hours and pay. Failure to properly track an employee’s hours or pay or the failure to display the requirements of the FLSA are, therefore, violations of the FLSA.
Employers can avoid an FLSA by doing an audit to make sure their employees are properly classified and being fairly compensated. However, if your company is already facing a lawsuit from a current or former employee, an employment law attorney can help defend you against the claims.