All employees expect to be paid fairly for the work that they perform. It can impact every aspect of your financial and personal life when you are not. Many employers are bound by law to pay employees minimum wage in Florida. However, what happens if you get paid under minimum wage? If you have been underpaid, it is important that you know how to go about getting the compensation you are owed.
The Basics of Minimum Wage Laws
Passed in 1938, the Fair Labor Standards Act is the primary federal law governing minimum wage in the United States. The FLSA stipulates that all private sector employees (with specified exceptions) of covered businesses are entitled to receive no less than the federal minimum wage of $7.25 per hour, provided as compensation for the work they do for an employer.
The list of covered businesses includes:
- Schools and colleges
- Government agencies
- Employers of domestic service workers (such as housekeepers)
- Residential care facilities
- Business with a gross annual dollar volume of sales or business volume exceeding $500,000
Even when a business is not covered by the FLSA, employees are protected by the FLSA if their work regularly involves them engaged in interstate commerce or producing goods for interstate commerce.
Examples of employees who are engaged in interstate commerce include those who:
- produce goods (such as a worker assembling components in a factory or a secretary typing letters in an office) that will be sent out of state;
- regularly make telephone calls to persons located in other States;
- handle records of interstate transactions;
- travel to other States on their jobs;
- and do janitorial work in buildings where goods are produced for shipment outside the State.
Some states have minimum wages above or below the federal requirement. Employees must be paid according to the higher wage.
While exceptions exist, employers must ensure that non-exempt employees get the minimum wage they are entitled to — no matter what. The employer can incur lawsuits, fines, and penalties if they do not.
Is It Illegal to Pay Under Minimum Wage?
Whether it is illegal for an employer to pay less than the minimum wage depends on the type of business activities your employer engages in, how much money the business makes yearly, your specific employment arrangements, and your job duties. Take these two scenarios into consideration:
- Your employer may have annual gross sales or business volume exceeding $500,000. However, if you are an independent contractor with that employer, you are still not entitled to minimum wage, even if the business is covered under the FLSA. Therefore, it would not be considered illegal for your employer to pay under minimum wage. However, it is not uncommon for employers to misclassify employees as independent contractors, thereby denying the employees critical benefits, such as minimum wage.
- You are a full or part-time W-2 employee, and the total sales volume is under $500,000 annually. However, the business produces goods for interstate commerce. The employer may argue that you are not owed minimum wage due to that sales volume. But their goods are sold in other states, making you, the employee whose work regularly involves interstate commerce, protected by the FLSA because the FLSA covers individual employees who are “engaged in commerce or in the production of goods for commerce.”.
Employers can face significant legal consequences when they illegally pay under the federal minimum wage. Employers can expect, for example, lawsuits from private citizens, the Secretary of Labor, and a loss of their good reputation. They may also expect:
- Serious fines per wage violation;
- The obligation to pay court costs, attorneys’ fees, and other damages in lawsuits;
- Penalties that include revoking an employer’s business license;
- Labor Department audits into time and pay and employee classification records;
- Court mandates to grant back pay to employees who have not been properly paid.
An employer may believe they are saving money by illegally paying employees less than the minimum wage. But in the end, it may have to hand over even more money.
Common Tactics Employers Use to Skirt Minimum Wage Laws
Most employers understand their obligations under the Fair Labor Standards Act. However, some still attempt to evade their obligations using tactics that result in employees not receiving the appropriate compensation.
One tactic employers use is timesheet manipulation. Employers can sometimes under-report hours worked to avoid paying minimum wage. For example, if a restaurant owner’s records show that a tipped server worked fewer hours than the server actually worked, the restaurant may be able to make it seem like that server’s tips covered the minimum wage obligation when, in fact, the tips were not enough to cover the restaurant’s minimum wage obligation to the server, entitling the server to additional compensation.
Employers might also attempt to misclassify employees, sometimes even mistakenly. Because some types of employees are exempt from minimum wage laws, employers may attempt to misclassify the nature of their workers’ job duties to avoid paying minimum wage. For example, a full-time employee may be misclassified as an independent contractor who is not entitled to minimum wage.
Another tactic is to use the complex and ever-changing joint employer rules. Under the FLSA, an employee can have more than one employer for the work they perform. For example, a local pizza chain employee may be working for both a franchisor and a franchisee, or a construction worker may be working for both the general contractor’s business and the subcontractor. Both employers are responsible for worker protections, like minimum wage. In some cases, one business may violate the law by not paying minimum wage and then attempt to shift liability for the violation to the other business. A business is especially likely to do this if the other business is listed as the employer of record. However, being listed as the employer of record does not mean the other business is off the hook.
If you suspect your employer is using one of these tactics, do not hesitate to contact an experienced employment lawyer for advice on how to fight for your rights.
Who Is Exempt from Minimum Wage Laws?
It is possible to have a job for which your employer can legally pay you less than minimum wage. The job types that fall into this category include:
- Independent contractors
- Full-time students
- Student learners
- Homeworkers making wreaths
- Newspaper delivery workers
- Switchboard operators
- Fishing professionals
- Field sales professionals
- Motor vehicle salespersons
- Companions for the elderly
- Federal criminal investigators
- Seamen not on American vessels
- Farmworkers employed on small farms
- Part-time home-based childcare employees
- Seasonal amusement or recreational establishments
- Employees with disabilities that diminish their work capacity
Tipped employees (a tipped employee is an employee engaged in an occupation in which they customarily and regularly receive more than $30 a month in tips) are also permitted to make less than minimum wage. However, their employer must make up the difference if their tips do not ultimately add up to at least $7.25 per hour.
Executive, administrative, professional, and outside sales employees, as defined in Department of Labor regulations, who are paid on a salary basis, are exempt from both the minimum wage and overtime provisions of the FLSA. Exemptions are narrowly construed against the employer asserting them.
Signs You Are Being Paid Less Than Minimum Wage
While some signs that your employer is paying less than minimum wage are obvious, others may not be. It is worth investigating to ensure you are receiving the pay you are entitled to if your employer is engaged in the following activities:
- Paycheck Discrepancies: Divide your gross pay by the number of hours you worked. If it is less than $7.25, you might be being paid less than minimum wage.
- Unauthorized Deductions: Any amount deducted from your paycheck cannot result in you being paid less than minimum wage if you are a non-exempt employee.
- Asking You to Work Off the Clock: Employers sometimes avoid paying the minimum wage by asking employees to do work “off the clock.” The FLSA requires employers to keep records of wages and hours. Most of the information is of the kind generally maintained by employers in ordinary business practice.
- Refusal to Provide Access to Records: If your employer refuses to show you your pay records, it may signify that it is.
Still, it is important to realize that any one of these actions alone does not necessarily constitute a violation. It is imperative to speak with someone familiar with wage and hour laws to determine whether your employer’s behaviors warrant further investigation
Can You Sue Your Employer for Underpaying You?
If your employer is underpaying you, there are several actions you can take to remedy the situation. You can file a complaint with the U.S. Division of Labor Wage and Hour Division or contact your state or county agency.
However, federal and state agencies will only take on a limited selection of cases.
Another more common route is to file a private lawsuit. Before you do this, you should:
- Gather your evidence, including pay stubs, tax documents, timesheets, employment agreements, and any communication regarding your pay.
- Consider speaking to your employer or HR department and asking for the discrepancy to be corrected.
If you still believe your employer is underpaying you, contact a lawyer right away, as an attorney will be able to evaluate your case, determine the potential damages, discuss the statute of limitations, and potentially pursue the case against your employer.
Holding your employer accountable for unpaid and underpaid wages is a complex process, but it is possible with the help of knowledgeable employment law attorneys on your side.
How to Report Minimum Wage Violations
If you want to report minimum wage violations, you can contact the Wage and Hour Division of the Department of Labor (“DOL”) or your local or state agency (in states that have them). Either way, you will go through a process that looks something like:
- Gathering Information: You will need to provide information about yourself, your employer, and your employment arrangement.
- Submitting Evidence: If you have pay stubs, pay records, tax documents, or any other evidence of being underpaid, you will be asked to submit it.
- Deciding How to File: To file with the DOL, you can contact the DOL by phone at 1-866 4 U.S. WAGE, or you may contact them by email through their official online form.
- Waiting for a Decision: After submitting all of your information, you will wait for someone from the DOL, local or state agencyto contact you regarding your case.
Once you file your complaint, the agency will decide how to proceed. They may decide to conduct an audit or an investigation. The agency may also decide to sue your employer for back pay and liquidated damages.
Consult an Employment Law Attorney
If you think you have been underpaid in violation of the law, consult with a qualified and experienced employment law attorney. They can evaluate your case, determine potential damages, and help you get the compensation you deserve.
The attorneys at Wenzel Fenton Cabassa, P.A. focus only on employment law cases, which means the team has in-depth knowledge of minimum wage rules and regulations. Contact our FLSA minimum wage attorneys today for a free case evaluation and to learn more about ensuring you are paid properly and for all hours worked.
Please Note: At the time this article was written, the information contained within it was current based on the prevailing law at the time. Laws and precedents are subject to change, so this information may not be up to date. Always speak with a law firm regarding any legal situation to get the most current information available.