In a recent National Club Association newsletter, a former employee in South Florida is suing an unidentified club for not paying overtime wages, which hinges on whether the plaintiff was a nonexempt employee. 

The National Club Association detailed one club’s issues with overtime wages for nonexempt employees.

An unidentified private club in South Florida is the subject of a new lawsuit by a former employee who claims that the club did not pay him the overtime wages he was rightfully owed. The plaintiff worked as a sous chef at the club from October 2014 to May 2015 and was classified as a nonexempt employee, according to the plaintiff.

The former sous chef alleges that he worked more than 40 hours a week but was not properly compensated due to the club’s decision to refuse to issue overtime pay. The suit claims the club also failed to keep proper time records, as required by the Fair Labor Standards Act, NCA reported.

Making matters more complicated for the club, the plaintiff is seeking to lead a group of employees in this case that also allegedly did not receive owed overtime pay.

This case hinges on whether the plaintiff was a nonexempt employee or not. Although the case has yet to be heard, this proves to be a cautionary tale for clubs that have nonexempt employees especially as the new overtime rule is expected to be released sometime in 2016. Under current law, salaried employees making at least $455 per week ($23,660 per year) and who meet the requirements under the “primary duty” test are exempt from overtime compensation. Under the Department of Labor’s (DOL’s) proposed rule, the minimum salary would increase to $970 per week ($50,440 per year) or the 40th percentile of weekly earnings for full-time salaried employees in the U.S., NCA reported.

The proposed overtime rule poses several challenges to clubs, such as its failure to account for differences in costs of living, automatic salary threshold increases and variable employee schedules. With an uncertain implementation date, clubs should prepare for the rule change today, the NCA recommends. Clubs should reevaluate their relationships with their exempt employees and clearly define employees’ roles and duties to comply with the regulation.

Clubs should also be aware of the increased scrutiny regarding overtime by DOL and the nation as a whole. The recent movement for increased employee pay and benefits is considerable as issues such as paid sick leave, minimum wage and others have gained more prominence, NCA reported.