Broward County Passes Wage Theft Ordinance

Following Miami-Dade’s lead, Broward County recently passed a preliminary version of a Wage Theft Ordinance. The Ordinance was sponsored by Vice Mayor Kristin Jacobs whose son allegedly fell victim to non-payment of wages, and seeks to communicate to “companies...that wage theft is not OK in Broward County”. The Ordinance largely duplicates existing Federal remedies already available to employees, and is estimated to cost the County $175,000 in annual administration costs. A similar effort in Palm Beach County recently failed.

The Ordinance applies to any employer of any size with employees working anywhere in the County, regardless of where the employer is located. It requires that wages be paid within 14 days of being earned, unless the employer has another “established policy or practice” of regular pay periods.

Employees who believe they are owed as little as $60 can pursue a claim under the Ordinance. The employee must first send a written demand letter to the employer detailing the amount of the unpaid wages, including the dates and hours worked, If the demand is not paid within 15 days, the employee may then file an administrative complaint with a newly created County bureaucracy, which will appoint a County-employed hearing examiner to determine the dispute. While the hearing examiner must be a licensed attorney, the Ordinance does not require that he/she have any experience or expertise with the various federal and state laws applicable to such a claim. Nevertheless, the hearing examiner will have the power to subpoena witnesses and documents, order depositions and written discovery requests, consolidate multiple claims against a single employer for consideration in one hearing (similar to collective actions under the Fair Labor Standards Act), and impose fines and penalties for refusals to comply.

The Ordinance requires an in-person mini-trial, after which the hearing examiner will issue a final and binding determination.  Employees would be entitled to recover any unpaid back wages, plus an equal amount in liquidated damages, as well as attorneys fees. Employers are also obligated to pay the county’s administrative costs. Employers who can prove that the failure to pay the disputed wages was in good faith and that they had reasonable grounds for believing the non-payment was not illegal, can ask the hearing examiner to reduce or eliminate the liquidated damages award. Employers must pay the final determination within 30 days. Since the Ordinance also potentially applies to any supervisor, payroll manager, or individual responsible for making the wage decision at issue, the personal assets of these individuals are potentially at risk.

A final version of the Ordinance will be considered later this year and, if passed, will be effective January 1, 2013. Employers will be obligated to post a new County issued notice, along with the various other Federal and State notices, advising employees of the availability of the Ordinance.

The Broward Ordinance differs significantly from the Miami-Dade Ordinance, creating a patch-work of differing and inconsistent obligations for South Florida employers. Thus, Broward’s passage of the wage theft Ordinance could provide significant impetus for a renewed effort in state legislature to revisit legislation which failed to pass last session and which would pre-empt such local ordinances.