FAMILY OFFICES: Unpaid Overtime and Other Issues Impacting Family Office Employees
“Family Offices,” which provide a wide range of support and services tailored to meet the needs of high net-worth individuals and families, are increasing in popularity. To support growing operations, Family Offices are hiring more workers, including executive and personal assistants, office administrative staff, personal drivers, and the like. Regardless of the position, Family Office workers face certain challenges, including:
- Long work hours
- Unpredictable scheduling
- Being on call 24/7
- Ever-changing job responsibilities
- Challenging office personalities and work policies
Based on the increasing demands made on Family Office workers, it is important that these workers understand their employment rights, especially when it comes to overtime wage issues.
This blog post will discuss some major issues faced by Family Office workers, including:
- Worker misclassification
- Unpaid overtime wages
- Unpaid wages for off-the-clock and on-call time
- Harassment
- Retaliation
Misclassification: Employee v. Independent Contractor
At the outset, employers will “classify” new workers as employees or independent contractors. Under the Fair Labor Standards Act (“FLSA”), employees and independent contractors have different rights. For example, under the FLSA, an employee is generally entitled to at least the minimum wage for all time worked and overtime pay for time worked in excess of 40 hours per week unless the employee qualifies as an “exempt” employee. Conversely, an independent contractor has no right to minimum wage or to receive overtime pay under the FLSA. An employer’s misclassification of an employee as an independent contractor is a serious issue, as it often deprives an employee from receiving all wages owed for hours worked, among other issues. But Family Office employees face another, increasingly common issue – being classified as an “exempt” employee.
Misclassification: Exempt v. Nonexempt and Unpaid Overtime Wages
Under the FLSA, employers classify employees as “exempt” or “nonexempt.” Nonexempt employees are entitled to overtime wages, where exempt employees are not. Whether an employee is “exempt” or “nonexempt” depends on:
- How much they are paid
- How they are paid (salary or hourly)
- What kind of work they do
While there are specific exemptions for certain kinds of work (e.g., executive and professional exemptions), most employees covered by the FLSA are nonexempt employees and thus entitled to overtime pay regardless of how their employer has classified them. For Family Office employees, an employer may classify the employee as an exempt employee and pay the employee a generous salary, as opposed to an hourly wage. However, this does not mean the employee is “exempt” under the FLSA.
Family Offices often misclassify office employees, such as personal or executive assistants, as exempt employees and therefore do not pay overtime that is owed. However, most office employees do not perform “exempt” work, regardless of how and how much they are paid. Further, job titles or position descriptions do not determine whether an employee is exempt or nonexempt under the FLSA. It is the employee’s actual job tasks that must be evaluated, along with how those tasks fit into an employer’s overall operations.
For example, a Family Office classifies a salaried “executive assistant” as an exempt employee. However, the executive assistant performs only clerical office work, such as filing, filling out forms, preparing routine office reports, answering telephones, ordering supplies, and making travel arrangements. The executive assistant is not performing exempt tasks under the FLSA and, thus, is a nonexempt employee entitled to overtime wages for hours worked in excess of 40 hours per week.
Off-the-Clock Time
Another related issue facing Family Office employees is working “off-the-clock” hours. Under the FLSA, employers must maintain time and pay records for nonexempt employees, including hours worked each day and total hours worked each week. However, employers are not required to maintain daily and weekly work hour records for exempt employees.
In a Family Office, the issue often arises when a salaried nonexempt employee is misclassified as an exempt employee, and the employer does not keep the employee’s daily or weekly hours worked records. The employee may work more than 40 hours per week by coming into work early or staying late, or even waiting for work if the boss requires the employee to wait. But there is no record of the actual time the employee worked. This often results in Family Office employees not being paid the wages they are owed, including overtime hours beyond the 40-hour workweek.
On-call Time
Family Office employees also find that they are often “on call” or on “standby” when it comes to their job. While exempt employees are not entitled to additional pay for being on-call, nonexempt employees may be entitled to additional wages. Under the FLSA, whether a nonexempt employee must be paid for on-call time depends on whether they are “waiting to be engaged” or are “engaged to wait.” “Waiting to be engaged” means that the employee is not on duty, may use their time freely, and is not performing a specific work task. However, “engaged to wait” means that the employee is required to stay at the workplace or is so near to the workplace that they cannot use their time freely. In the “engaged to wait” case, the employee is entitled to be paid for this time, including overtime pay.
Determining whether a Family Office employee’s on-call time is compensable can be tricky and must be analyzed based on the employee’s specific circumstances.
Harassment
Family Offices are not immune to harassment, including sexual harassment, in the workplace. In any workplace, all employees are entitled to perform their jobs free from unwanted harassment, sexual advances, and offensive and unwelcome conduct. Unfortunately, sexual harassment is becoming increasingly common in Family Offices. Sexual harassment may occur in a variety of circumstances, including harassment from an employee’s supervisor or outside vendor based on the employee’s sex. In cases of unlawful sexual harassment, or any unlawful harassment, the victim employee has the right to assert a claim against their employer for the unlawful conduct and may be entitled to damages for the unlawful conduct.
Retaliation
Workplace retaliation is prohibited under a number of state and federal laws, including the FLSA, Title VII of the Civil Rights Act of 1964, and the Florida Civil Rights Act. Unlawful retaliation in the workplace is often the result of an employee complaining to their employer about an aspect of their job, the work environment, or other conditions of employment. Employee complaints about unpaid wages, discrimination, harassment, and reporting unlawful employment practices, among others, are considered “protected activity.”
It is unlawful for an employer to “punish” or retaliate against an employee who engages in protected activity. Retaliation by an employer may include termination of employment, demotion, denying promotion, reducing work hours, or any other discrimination against the employee for engaging in a protected activity. For example, in a Family Office, an employee may complain to their employer about not being paid overtime wages owed. Shortly after making the complaint, the employer fires the employee for complaining. This is unlawful retaliation under the FLSA. Additionally, employers may not retaliate against an employee who is considered a “whistleblower.” Both federal and Florida State laws provide protections for employee whistleblowers who object or refuse to participate in an employer’s illegal activity, who disclose or threaten to disclose an employer’s illegal activity, or who participate in a government agency’s investigation regarding an employer’s activities.
Final Thoughts for Family Office Employees
Family Office employees in Florida who believe they are owed wages, including wages at the overtime rate, or who believe their employer has unlawfully retaliated against them, should consult with a Florida attorney. To recover unpaid wages, employees should retain accurate records of time worked. For retaliation and harassment, employees should keep a record of any complaints made to their employer, including supervisors and/or Human Resources. Employees should also consider potential witnesses who can verify the employee’s claims.
BT Law Group understands that employees often fear retaliation for challenging an employer’s wrongful practices or actions. BT Law Group takes these fears seriously and works with employees to protect their workplace rights, including collecting unpaid overtime wages, backpay, and other available damages. BT Law Group is here to help Family Office employees.
Our Process
As a first step, your assigned legal team will gather and review records related to your claim, including any employment contract or offer letter, time sheets, any relevant communications, and any disciplinary actions, including performance improvement plans or termination paperwork.
These documents will help your attorneys evaluate your claims and develop a strategy to obtain the best results for your situation.
Once your legal team completes the initial investigation, they will work with you to determine the best legal strategy for your situation. Your legal team will make recommendations and will work with you to formulate the most effective approach to obtain your desired outcome.
After you and your legal team formulate the strategy, your legal team will advocate on your behalf to obtain your desired outcome. This could include negotiating a separation package, engaging in pre-suit negotiations, sending a demand letter, and/or filing a charge of discrimination or lawsuit on your behalf.
The attorneys at BT Law are experienced trial lawyers and will advocate for your rights in the courtroom as necessary.
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Trusted advisors
Jason D. Berkowitz is a Founding Partner of BT Law Group, PLLC. Prior to starting BT Law, Mr. Berkowitz was a Partner in the Miami office of a national labor and employment law firm where he represented management exclusively.
Anisley Tarragona is a founding partner of BT Law Group, PLLC. Prior to starting BT Law, Ms. Tarragona worked in the Miami office of a national labor and employment law firm where she represented management exclusively. Ms. Tarragona, who was born and raised in Cuba, is fluent in Spanish.
