Should Employers Be Concerned About Broward County’s Wage Ordinance? Probably Not.

On January 2, 2013, Broward’s new wage ordinance goes into effect.  Originally titled “Wage Theft,” the ordinance, codified at Chapter 20 ½ of the Broward County Code of Ordinances, is now called “Non-Payment of Earned Wages.”  Regardless of its name, business groups vigorously opposed the ordinance, claiming it was unnecessary and duplicative of existing laws.  They were right.  But for those very reasons, I believe the new ordinance will be infrequently used and should not be of great concern to local businesses.

Existing law already provides a financial incentive to attorneys to take even low-dollar wage cases to court.  The federal Fair Labor Standards Act (“FLSA”) entitles employees who prevail in a minimum wage or overtime lawsuit to recover their attorneys’ fees.  A separate Florida statute, section 448.08, allows employees who prevail in any action for unpaid wages to recover their attorneys’ fees.  Thus, even employees who are exempt from minimum wage and overtime laws but who are denied wages owed to them under an agreement with their employer can recover their attorney’s fees if they prevail.

Because of these financial incentives and a cadre of attorneys who specialize in unpaid wage cases, South Florida leads the nation in wage-related lawsuits.  And each year, the number of new cases seems to grow.

Will Broward County’s wage ordinance significantly accelerate this trend?  Based on my reading of the ordinance, it seems unlikely.  The remedies under the ordinance are no greater than what’s available under existing laws.  Under the ordinance, employees can recover their back wages and an equal amount in liquidated damages – precisely what the FLSA provides.  If the employee hires an attorney and prevails, he can also recover his attorney’s fees.  But again, that’s no different than what existing state and federal law already provides.

And the ordinance actually gives attorneys a disincentive to use it:  Before filing a complaint, the employee must first notify the employer in writing of the wage deficit and give the employer 15 days to remedy the problem.  If an attorney employs this procedure on behalf of his client, and the employer pays the employee, no case can be filed and the attorney cannot recover his fees.

At the same time, the ordinance makes it easy for employees to proceed pro se.  For example, the ordinance does not require the payment of a filing fee.  And to initiate a case, the employee need only file a written complaint; the County is responsible for serving the complaint upon the employer.

In short, the Broward County ordinance seems to offer no additional incentive over existing law for attorneys to file wage-related lawsuits.  If the ordinance results in additional wage cases being filed, it seems likely that such cases will be filed by employees, not by attorneys.  If so, that may actually be good news for employers. When wage-related lawsuits settle, as they almost always do, a significant portion of the settlement typically consists of attorney’s fees.