March 24, 2010
Daily Business Review
It took three months for a group of 20 workers, men and women of all ages and nationalities, to finish scrubbing down and clearing away the dust at a newly renovated Miami Beach hotel.
The industrial cleaning crew worked for little more than minimum wage, hurrying to prepare the hotel in time for its reopening. But when payday arrived, they received only half of what they were owed by a subcontractor, according to Honduran worker Angelica Pinto.
U.S. Labor Department officials told them most didn’t qualify for protection under federal or state law.
An ordinance passed in Miami-Dade County last month, believed to be the first county law of its kind nationwide, now seeks to protect workers from wage theft who previously fell through the cracks. It takes an aggressive stance on employers that fail to pay employees their full wages, creating a system for cheated workers to report employers and have their case heard and tried in a court-like environment.
However, some management-side labor attorneys question whether the legislation was drafted too quickly and contend it will have unintended consequences.
Under the new county ordinance, wage theft claims of $60 or more can go before a county-hired hearing examiner selected from a pool of certified mediators, attorneys or retired judges by the Miami-Dade clerk’s office. The examiner will have the authority to administer oaths, issue subpoenas and order production of evidence. Complaints must be filed within a year of the work that went unpaid.
Employers found to be in violation of the law must pay workers triple the amount of disputed wages plus administrative costs estimated to be $3,500 per hearing. The burden of proof falls on employees who file complaints, but businesses must keep precise records to make their case.
Cases will head to Miami-Dade County Court if violators refuse to pay damages.
The new ordinance, which broadly defines wage theft as failing to pay any portion of wages within 14 calendar days, took effect March 1. The measure was sponsored by County Commissioner Natacha Seijas and was the culmination of a two-year effort by several nonprofit groups, undocumented immigrant advocates and worker rights groups.
Avenue for Redress
It’s an attempt to address a growing problem in South Florida, according to a memo fromCounty Manager George Burgess to commissioners. Federal labor officials receive about 50 complaints a day from Miami-Dade County that are “easily discerned” and require little to no investigation — although a third fall outside federal jurisdiction.
The ordinance aims to give workers not covered by federal law a venue for recovery.
The federal Fair Labor Standards Act applies only to people working for businesses engaged in interstate commerce and companies with annual revenue of $500,000 or more. The new county law supported by the AFL-CIO will fill some of the gaps by covering small businesses with irregular pay schedules such as plant nurseries, construction companies and landscapers.
As of Tuesday, the county Department of Small Business Development, which is responsible for enforcement, received five complaints against two employers.
Those that helped draft the law, such as the Florida Immigrant Coalition, say workers like Pinto will now have an avenue for redress. Coalition director Maria Rodriguez said, “It’s not going to be the panacea to stop the practice” of wage theft but will target firms that cheat as part of their business model.
“If they don’t have liquidity to pay their workers, then maybe they shouldn’t be in business. The workers aren’t a line of credit,” she said.
Businesses in Jeopardy
David A. Buchsbaum, a Fort Lauderdale attorney with Fisher & Phillips who represents employers, said the strict 14-day window to pay employees will put several businesses in jeopardy because many run on pay schedules that are longer.
“I’m not sure enough thought was given to the implications of this ordinance on employers that have done nothing wrong,” he said.
Buchsbaum said he has contacted several clients and alerted them to the new law. He advises business owners to “take a careful look at what your pay structure is and, if it’s more than 14 days, the safest solution is to create a written agreement and have all employees sign it.”
Greenberg Traurig shareholder Joseph Fleming, who represents business management, warned the law extends beyond businesses to people who could be accused of wage theft if there’s a dispute with a baby sitter or landscaper.
“If you make a mistake with a person you’ve hired, you’re now sued for wage theft,” he said. “A lot of people involved will be individuals who are having people watch their kids and seniors.”
Fleming also criticized what he called the balkanization of wage law, which he fears will make it more difficult for businesses to operate across county lines. He hopes the County Commission, which unanimously approved the ordinance in February, will revise it or scrap it and leave wage law to federal and state agencies.
“They may get it right. They got it wrong, and they need to go back to the drawing board,” he said.
Jose J. Rodriguez, an attorney with the immigrant-assistanc e nonprofit Florida Legal Services, said the law likely will be amended next month to address several concerns.
Among them is the possible extension of the 14-day pay schedule requirement, which allows for a wait of up to 30 days if employees sign agreements with employers.
Maria Rodriguez has long supported the law’s implementation and scoffs at worries about malignant consequences.
“There’s nothing here that is going to undermine legitimate employers. On the contrary, it’s going to benefit them by making unscrupulous employers accountable,” she said.