Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze the statutes of limitations applicable to the five categories of wage-and-hour claims asserted in the demand letter dated January 14, 2026, from Garza, Linden & Okafor LLP ("GLO") on behalf of Daniela M. Serrano and a putative class and collective of current and former hourly, non-exempt employees of Verimark Hospitality Group Inc. ("VHG" or the "Compa

II. Factual Background A. The Demand Letter and Allegations On January 14, 2026, Garza, Linden & Okafor LLP ("GLO"), through lead attorney Marco A. Garza and associate Priya N. Chandrasekaran, transmitted a demand letter to VHG's General Counsel. GLO is located at 600 Brickell Avenue, Suite 2200, Miami, Florida 33131, and is a well-known plaintiff-side labor and employment firm with significant experience in FLSA col

1. Failure to pay overtime at the rate of one and one-half times the regular rate of pay for hours worked in excess of forty per workweek, in violation of 29 U.S.C. § 207(a). The demand letter alleges that VHG systematically miscalculated the regular rate of pay for purposes of overtime computation and, in certain instances, failed to record all compensable hours, resulting in underpayment of overtime premiums.

2. Illegal automatic meal-break deductions of thirty minutes per shift while employees remained on-call and were not fully relieved of all duties, in violation of the FLSA's compensable-time requirements. The demand letter alleges that VHG's timekeeping system automatically deducted thirty minutes from each employee's recorded hours for a purported meal break, regardless of whether the employee actually received an u

3. Failure to compensate employees for pre-shift and post-shift work, including donning and doffing of uniforms and personal protective equipment, computer boot-up and system login procedures, and shift-handover briefings. The demand letter estimates that these activities consumed approximately fifteen to twenty-five minutes per shift and were performed off the clock — that is, before the employee clocked in at the s

4. Failure to pay the Florida minimum wage for tipped employees, in violation of Article X, Section 24 of the Florida Constitution. The demand letter alleges that VHG claimed a tip credit against its tipped employees' wages but failed to satisfy the requirements for doing so, including providing adequate notice to employees regarding the tip credit and ensuring that total compensation (direct wages plus tips) met or

5. Willful misclassification of "lead" and "senior" hourly roles as exempt under the FLSA administrative exemption, in violation of 29 U.S.C. §§ 206 and 207. The demand letter alleges that VHG improperly classified certain experienced hourly employees who held "lead" or "senior" designations as exempt from FLSA overtime requirements under the administrative exemption, despite the fact that these employees' primary du

III. FLSA Statute of Limitations — 29 U.S.C. § 255(a) A. Statutory Framework The Portal-to-Portal Act of 1947 established the limitations periods for causes of action arising under the Fair Labor Standards Act. Specifically, 29 U.S.C. § 255(a) provides that any action commenced on or after May 14, 1947, to enforce a cause of action for unpaid minimum wages, unpaid overtime compensation, or liquidated damages under th

IV. Willfulness Standard Under the FLSA A. Legal Standard — *McLaughlin v. Richland Shoe Co.* The determination of whether an employer's FLSA violation was "willful" is governed by the standard established by the United States Supreme Court in McLaughlin v. Richland Shoe Co., 486 U.S. 128 (1988). In McLaughlin, the Court held that an employer's violation of the FLSA is "willful" if the employer "either knew or showed

1. Prior complaints. Did VHG receive any prior complaints — whether from individual employees, groups of employees, or through any internal reporting mechanism such as a compliance hotline — regarding unpaid overtime, automatic meal-break deductions, uncompensated pre-shift or post-shift work, or tip-credit compliance? The existence of prior complaints, even if informally communicated, could support a finding that VH

2. DOL investigations. Has VHG been the subject of any prior investigations by the U.S. Department of Labor, Wage and Hour Division, or any Florida state-level wage-and-hour enforcement agency? A prior investigation — even if it did not result in a finding of violation — would demonstrate that VHG's attention was called to its wage-and-hour practices.

3. Meal-break deduction configuration. Did VHG's human resources department or legal counsel review the automatic meal-break deduction configuration in the Luminos TimeTrack system (identified as rule AR-MEAL-030) at the time it was implemented on or about January 1, 2022? If VHG implemented the automatic deduction without analyzing whether employees were, in practice, receiving duty-free meal breaks of at least thir

4. Internal audits. Did VHG conduct any internal audits or compliance reviews of its wage-and-hour practices at any time during the relevant period? If so, what were the findings, and what corrective actions, if any, were taken in response?

5. FLSA compliance training. What training, if any, did VHG provide to property-level human resources managers, general managers, and department heads on FLSA compliance topics, including overtime calculation, timekeeping requirements, meal-break rules, and exemption classification standards?

6. Payroll vendor guidance. Did VHG seek or receive guidance from Luminos Payroll Solutions Inc. regarding the overtime calculation algorithms, automatic deduction settings, or tip-credit configurations implemented in the Luminos TimeTrack system? If Luminos provided recommendations or warnings regarding compliance risks associated with certain system settings, and VHG disregarded or failed to act on those recommenda

V. Florida Constitutional Minimum-Wage Claims — Statute of Limitations A. Legal Framework

Article X, Section 24 of the Florida Constitution was adopted by popular vote through a ballot initiative in November 2004 and became effective on May 2, 2005. This provision establishes a Florida minimum wage that is separate from, and in most years exceeds, the federal minimum wage established under the FLSA. The Florida minimum wage is adjusted annually based on the Consumer Price Index for Urban Wage Earners and

Article X, Section 24(e) of the Florida Constitution provides a private right of action for employees who are paid less than the applicable minimum wage. An aggrieved employee may bring an action in any court of competent jurisdiction against the employer to recover the full amount of any unpaid minimum wages, together with liquidated damages in an amount equal to the unpaid wages (i.e., a mandatory doubling of unpai

VI. Accrual and Tolling Considerations A. FLSA Accrual As discussed in Section III.A above, a cause of action under the FLSA accrues at each regular payday immediately following the work period during which the alleged violation occurred. Each pay period in which the employer allegedly fails to pay the required minimum wage, overtime premium, or other compensation constitutes a separate and independently accruing cau

VII. Impact of Limitations Periods on Exposure Estimates The applicable statute of limitations directly affects the temporal scope of the claims and, consequently, the total potential damages exposure. This section presents preliminary exposure estimates under the three lookback scenarios corresponding to the three potentially applicable limitations periods. These estimates are preliminary and are intended to provide

VIII. Implications for Audit Scope and Data Collection A. Document Preservation and Collection Date Range Based on the limitations analysis set forth in this memorandum, records should be collected from January 1, 2021 through the present to cover the full five-year Florida lookback period, with a modest buffer to ensure completeness. This date range captures all three lookback scenarios: • The two-year FLSA non-will