MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION / ATTORNEY WORK PRODUCT
TO: Bernard Crawford, Responsible Partner Renata Vasquez, Billing Partner
FROM: Nadia Petrov, Lead Associate, Labor & Employment
DATE: February 10, 2026
RE: FLSA Administrative Exemption Analysis — Lead and Senior Hourly Role Classifications at Verimark Hospitality Group Inc.
MATTER: Calderwood & Harkness LLP Matter No. 1021-00005
CLIENT: Verimark Hospitality Group Inc. (Nasdaq: VMHG)
Right-click to update Table of Contents
I. Executive Summary
This memorandum analyzes whether Verimark Hospitality Group Inc.'s ("VHG" or the "Company") classification of certain "lead" and "senior" hourly-designated roles as exempt under the Fair Labor Standards Act ("FLSA") administrative exemption, 29 U.S.C. § 213(a)(1), and the implementing regulations at 29 C.F.R. § 541.200 et seq., is legally defensible. This analysis has been prompted by the demand letter dated January 14, 2026, from Garza, Linden & Okafor LLP ("GLO") on behalf of Daniela M. Serrano, which alleges, among other things, the willful misclassification of certain "lead" and "senior" hourly roles as exempt under the FLSA's administrative exemption. The misclassification allegation constitutes Allegation No. 5 of the five categories of alleged violations asserted in the GLO demand letter.
The scope of this memorandum encompasses seven at-issue hotel and resort properties operated by VHG in the Tampa Bay, Orlando, and South Florida markets within the State of Florida. Across these seven properties, VHG currently employs approximately 1,895 hourly employees. The putative collective identified by GLO encompasses an estimated 4,100 to 5,900 individuals spanning the period from January 2023 to the present, reflecting both current and former employees.
Based on my preliminary analysis of available job descriptions, payroll data, organizational charts, and information gathered through interviews with VHG's Vice President of Human Resources and Director of Payroll & Workforce Compliance, my bottom-line conclusion is as follows: Several of the lead/senior role classifications present significant defensibility concerns under both the salary-basis test and the duties test. VHG should anticipate that at least a subset of these roles — and likely the majority — will be found misclassified if this matter proceeds to litigation. I recommend that VHG give immediate consideration to prospective remediation for the most vulnerable role categories, while simultaneously engaging in targeted factual development to refine the exposure estimate and inform the Company's litigation and settlement posture.
Specifically, three of the six role categories at issue (Lead Front-Desk Associate, Lead Housekeeping Coordinator, and Lead Food & Beverage Attendant) are assessed as presenting HIGH risk of misclassification. Two additional categories (Senior Concierge and Senior Banquet Captain) present MODERATE-TO-HIGH risk. Only one role (Senior Maintenance Technician) has a colorable — though still uncertain — basis for exempt classification, and even that role is better analyzed under the executive exemption rather than the administrative exemption.
II. Background and Factual Context
A. The Demand Letter Allegations
On January 14, 2026, the law firm of Garza, Linden & Okafor LLP transmitted a detailed demand letter to VHG, authored by attorneys Marco A. Garza and Priya N. Chandrasekaran. The letter was received by VHG General Counsel Devin K. Arroyo on January 16, 2026, and was promptly forwarded to this firm on January 17, 2026.
The demand letter identifies five discrete categories of alleged FLSA violations. Allegation No. 5 — the subject of this memorandum — asserts the willful misclassification of certain "lead" and "senior" hourly roles as exempt under the FLSA administrative exemption. GLO contends that these employees were improperly denied overtime compensation for all hours worked in excess of forty per workweek, and that the misclassification was knowing and deliberate, thereby supporting a three-year statute of limitations under 29 U.S.C. § 255(a).
The aggregate demand across all five claim categories is $18.5 million, inclusive of back pay, liquidated damages, and attorneys' fees. GLO has set a response deadline of February 28, 2026, after which it indicates it will proceed with the filing of a collective-action complaint in the United States District Court for the Middle District of Florida.
The applicable limitations periods are as follows: for willful violations, a three-year lookback from the date the action is commenced, which would reach back to approximately January 14, 2023; for non-willful violations, a two-year lookback to approximately January 14, 2024. The willfulness characterization has material consequences, as discussed in Section V.D below.
B. VHG Workforce Overview
Verimark Hospitality Group Inc. is a publicly traded hospitality company (Nasdaq: VMHG) that owns and operates fourteen hotel and resort properties throughout the State of Florida. As of December 31, 2025, VHG employed approximately 8,200 individuals across its portfolio. Of these, approximately 5,900 employees (roughly 71.95% of the total workforce) were classified as non-exempt hourly employees.
The seven properties at issue in the GLO demand letter are:
1. Verimark Regency Tampa — Tampa, Florida
2. Verimark Grand Orlando — Orlando, Florida
3. Verimark Shores Clearwater — Clearwater, Florida (owned by Palomar Realty Partners LLC; managed by VHG under Hotel Management Agreement HMA-2021-0601-PC)
4. Verimark Bayfront St. Petersburg — St. Petersburg, Florida
5. Verimark Resort & Spa Boca Raton — Boca Raton, Florida
6. Verimark Oceanview Fort Lauderdale — Fort Lauderdale, Florida
7. Verimark Key West Collection — Key West, Florida
The total employee headcount at these seven properties is approximately 2,620, of whom approximately 1,895 are hourly employees. It is worth noting that the Verimark Shores Clearwater property is not owned by VHG but is managed by VHG under a hotel management agreement with Palomar Realty Partners LLC, which may give rise to joint-employer issues that are beyond the scope of this memorandum but should be addressed separately.
C. Roles at Issue — Lead and Senior Designations
Based on our preliminary review of job descriptions obtained from Carla S. Whitfield, Vice President of Human Resources, and Enrique J. Fuentes, Director of Payroll & Workforce Compliance, the following six role categories carry "lead" or "senior" designations and have been classified by VHG as exempt from overtime requirements under the FLSA administrative exemption:
1. Lead Front-Desk Associate — present at all seven properties
2. Senior Concierge — present at five of the seven properties (not present at Verimark Key West Collection or Verimark Shores Clearwater)
3. Lead Housekeeping Coordinator — present at all seven properties
4. Senior Banquet Captain — present at four properties (Verimark Regency Tampa, Verimark Grand Orlando, Verimark Resort & Spa Boca Raton, and Verimark Oceanview Fort Lauderdale)
5. Lead Food & Beverage Attendant — present at six of the seven properties
6. Senior Maintenance Technician — present at all seven properties
The estimated total number of employees currently occupying these lead/senior classifications across the seven at-issue properties is approximately 85 to 110 individuals. This range reflects uncertainty regarding the precise headcount at certain properties where we have not yet received complete organizational charts.
It is critically important to note that these roles were historically classified as hourly non-exempt positions. The reclassification to exempt status occurred in connection with a VHG-wide job-code restructuring that became effective approximately January 2023. This restructuring coincided with the transition to VHG's then-current employee handbook, which preceded the current version (v.7.2, effective January 1, 2025). The timing of this reclassification — coinciding almost precisely with the outer boundary of the three-year willful-violation lookback period — raises questions about the basis for the reclassification decision that must be explored in further factual development.
D. Source Materials Reviewed
In preparing this memorandum, I reviewed the following materials:
• VHG Employee Handbook, version 7.2, effective January 1, 2025, as well as the prior version effective January 2023
• Job descriptions for each of the six role categories listed above, as provided by Carla S. Whitfield
• Payroll data from Luminos Payroll Solutions Inc., drawn from VHG's Luminos TimeTrack account (account number LTT-VHG-2022-0041), including compensation records reflecting pay method (salary versus hourly) and compensation amounts
• Organizational charts for each of the seven at-issue properties, as provided by Enrique J. Fuentes
• Information from interviews with Carla S. Whitfield (VP, Human Resources) and Enrique J. Fuentes (Director, Payroll & Workforce Compliance), conducted by Calderwood & Harkness attorneys on February 5–6, 2026
I note that these materials represent a preliminary evidentiary record. Significant gaps remain, including the absence of complete time-and-attendance data for exempt-classified employees (who may not have been required to record their hours), property-level detail regarding actual day-to-day duties as distinguished from template job descriptions, and any legal memoranda or compliance analyses that may have been prepared in connection with the January 2023 reclassification.
III. Legal Framework — FLSA Administrative Exemption
A. Statutory and Regulatory Basis
Section 13(a)(1) of the Fair Labor Standards Act, 29 U.S.C. § 213(a)(1), exempts from the Act's minimum wage and overtime requirements "any employee employed in a bona fide executive, administrative, or professional capacity . . . as such terms are defined and delimited from time to time by regulations of the Secretary [of Labor]." The Department of Labor ("DOL") has promulgated detailed regulations implementing this exemption, codified at 29 C.F.R. Part 541.
The administrative exemption is set forth in 29 C.F.R. § 541.200, which establishes a three-part test. An employee qualifies for the administrative exemption only if all three of the following conditions are met:
1. Salary-Basis Test (29 C.F.R. § 541.200(a)(1) and § 541.602): The employee must be compensated on a salary or fee basis at not less than the applicable minimum threshold amount per week.
2. Salary-Level Test (29 C.F.R. § 541.200(a)(1)): The employee's salary must meet or exceed the minimum salary threshold established by DOL regulation.
3. Duties Test (29 C.F.R. § 541.200(a)(2) and (a)(3)): The employee's "primary duty" must be (a) the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers, and (b) must include the exercise of discretion and independent judgment with respect to matters of significance.
Failure to satisfy any one of these three elements is fatal to the exemption. The employer bears the burden of proving that all three requirements are met for each individual employee. I discuss each element in detail below.
B. Salary-Basis Test — 29 C.F.R. § 541.602
The salary-basis test requires that an employee receive a predetermined amount of compensation each pay period "on a salary . . . basis" — that is, the employee must receive a fixed, predetermined salary that is not subject to reduction because of variations in the quality or quantity of the employee's work. 29 C.F.R. § 541.602(a). An employee is not paid on a salary basis if deductions from the predetermined salary are made for absences occasioned by the employer or by the operating requirements of the business.
The regulations identify certain impermissible deductions that, if made, will destroy the salary basis for the affected employee and potentially for all employees in the same job classification. These include:
• Deductions for partial-day absences (an employee who is ready, willing, and able to work must receive full salary for any workweek in which any work is performed, regardless of the number of hours or days worked);
• Deductions based on the quality or quantity of work performed;
• Deductions for absences caused by the employer's operating requirements.
The regulations also identify certain permissible deductions, including:
• Deductions for full-day absences for personal reasons other than sickness or disability;
• Deductions for full-day absences due to sickness or disability pursuant to a bona fide plan, policy, or practice of providing wage-replacement benefits;
• Penalties imposed in good faith for infractions of safety rules of major significance;
• Unpaid leave taken pursuant to the Family and Medical Leave Act;
• Deductions for full-day disciplinary suspensions imposed in good faith for violations of workplace conduct rules;
• Offsets of amounts received for jury or witness fees or military pay.
The regulations further provide a "safe harbor" provision at 29 C.F.R. § 541.603(d). Under this provision, an employer's actual practice of making improper deductions may destroy the exempt status of all employees in the same job classification under the same managers responsible for the improper deductions. However, the employer may avoid this result if it can demonstrate that (i) the improper deductions were isolated or inadvertent, (ii) the employer promptly reimburses the employee for the improper deduction, and (iii) the employer commits to prospective compliance.
Key issue for VHG: Several of the lead/senior roles at issue appear to have originated as hourly positions and may still be compensated on an hourly or hybrid basis (i.e., an hourly rate with a guaranteed weekly minimum). If the employees' weekly compensation is in fact computed by multiplying hours worked by an hourly rate — even if the resulting pay never drops below a stated weekly minimum — this arrangement may fail the salary-basis test. The DOL and courts have recognized a distinction between a guaranteed salary and an hourly rate that happens to produce a weekly total exceeding the minimum salary threshold. Under 29 C.F.R. § 541.604, an employer may compute an exempt employee's compensation on an hourly, daily, or shift basis only if certain conditions are met, including a reasonable relationship between the guaranteed salary and the amount actually earned. This area requires further investigation, as discussed in Section V.A below.
C. Salary-Level Test — Current Threshold
The salary-level test requires that the employee's weekly salary meet or exceed a minimum threshold established by DOL regulation. The applicable threshold has been the subject of significant regulatory activity and litigation in recent years, which I summarize below.
The 2024 DOL Final Rule. On April 23, 2024, the DOL issued a final rule increasing the minimum salary threshold for the administrative (and executive and professional) exemptions. The rule provided for a two-step increase: first, an increase to $844 per week ($43,888 annually), effective July 1, 2024; and second, a further increase to $1,128 per week ($58,656 annually), effective January 1, 2025. The rule also provided for automatic updating of the threshold every three years thereafter.
Litigation and Vacatur. In November 2024, a federal district court in the Eastern District of Texas issued a nationwide injunction vacating the 2024 final rule in its entirety, concluding that the DOL had exceeded its statutory authority in setting the salary threshold at levels that effectively displaced the duties test by screening out employees who would otherwise satisfy the duties requirements. As of the date of this memorandum, the vacatur remains in effect, and no appellate decision has issued. The DOL has not indicated whether it will appeal or pursue alternative rulemaking.
Applicable threshold. As a result of the vacatur of the 2024 rule, the salary threshold has reverted to the prior level established by the DOL's 2019 final rule: $684 per week ($35,568 annually). This is the threshold that governs VHG's exemption analysis for the foreseeable future, although counsel should continue to monitor developments in the ongoing litigation and any new rulemaking initiatives.
Observation regarding VHG employees. Even under the lower $684/week threshold, VHG must confirm that all lead/senior exempt-classified employees are in fact compensated at or above this level on a true salary basis. As discussed in Section IV below, several of the roles at issue are compensated at levels only marginally above the threshold, and the salary-basis concerns identified in Section III.B compound the risk. If any of these employees are found to be paid below $684/week in any workweek — for example, due to impermissible deductions or fluctuations in hourly-based pay — the salary-level test fails, and the exemption is unavailable regardless of the employee's duties.
D. Duties Test — Two-Prong Analysis
The duties test for the administrative exemption has two prongs, both of which must be satisfied. I address each in turn.
1. "Directly Related to Management or General Business Operations" — 29 C.F.R. § 541.201. The first prong of the duties test requires that the employee's primary duty be the performance of "office or non-manual work directly related to the management or general business operations of the employer or the employer's customers." 29 C.F.R. § 541.200(a)(2). This language has given rise to what courts and the DOL commonly refer to as the "administrative/production" dichotomy.
Under this framework, work that is "directly related to management or general business operations" refers to work involved in running the business itself — the administrative infrastructure and support functions that keep the enterprise operating. It does not encompass work that involves producing the employer's goods or delivering the employer's services to customers. In other words, the regulations distinguish between employees who "administer" the business and those who "produce" the product or service that the business exists to provide.
This distinction is of central importance in the hospitality industry. VHG's core business is the provision of guest services — accommodations, food and beverage, event hosting, and property maintenance. The "production" work of a hotel or resort enterprise consists of the direct delivery of those services: checking guests in and out, cleaning rooms, serving food and beverages, maintaining the physical plant, and attending to guest needs. By contrast, the "administrative" work of the enterprise consists of functions such as human resources, finance, accounting, budgeting, auditing, insurance, quality control, purchasing, procurement, advertising, marketing, research, safety and health management, personnel management, employee benefits administration, labor relations, public and government relations, legal and regulatory compliance, and computer network and database administration.
The regulation at 29 C.F.R. § 541.203 provides illustrative examples of administrative functions, which include:
• Tax, finance, accounting, budgeting, and auditing
• Insurance
• Quality control
• Purchasing and procurement
• Advertising and marketing
• Research
• Safety and health
• Personnel management, human resources, and employee benefits
• Labor relations
• Public and government relations
• Legal and regulatory compliance
• Computer network, internet, and database administration
The DOL has consistently taken the position that hospitality-industry employees who perform direct guest-service functions — including front-desk operations, housekeeping, food and beverage service, and property maintenance — are engaged in "production" work and do not satisfy the first prong of the administrative-exemption duties test, regardless of their job titles or whether they exercise some degree of lead or supervisory responsibility in connection with those functions.
2. "Exercise of Discretion and Independent Judgment with Respect to Matters of Significance" — 29 C.F.R. § 541.202. The second prong of the duties test requires that the employee's primary duty include "the exercise of discretion and independent judgment with respect to matters of significance." 29 C.F.R. § 541.200(a)(3). This is a demanding standard that requires a qualitative assessment of the nature and importance of the decisions the employee is authorized and expected to make.
The regulation at 29 C.F.R. § 541.202(b) identifies a number of factors relevant to this determination, including whether the employee:
• Has authority to formulate, affect, interpret, or implement management policies or operating practices;
• Carries out major assignments in conducting the operations of the business;
• Performs work that affects business operations to a substantial degree, even if the employee's assignments are related to operation of a particular segment of the business;
• Has authority to commit the employer in matters that have significant financial impact;
• Has authority to waive or deviate from established policies and procedures without prior approval;
• Has authority to negotiate and bind the company on significant matters;
• Provides consultation or expert advice to management;
• Is involved in planning long- or short-range business objectives;
• Investigates and resolves matters of significance on behalf of management;
• Represents the company in handling complaints, arbitrating disputes, or resolving grievances.
The regulation further provides, at 29 C.F.R. § 541.202(e), that the exercise of discretion and independent judgment must be distinguished from the use of skill in applying well-established techniques, procedures, or specific standards described in manuals or other sources. An employee does not exercise discretion and independent judgment merely because the employee follows prescribed procedures with some degree of latitude or makes choices among alternative methods of performing a task, if the choices are constrained by established guidelines. Similarly, the regulation distinguishes discretion and independent judgment from clerical or secretarial work, recording or tabulating data, and performing mechanical, repetitive, or routine work.
This distinction is highly relevant to VHG's lead/senior roles, where the employees may exercise some judgment in task execution but are generally bound by established operating procedures, checklists, rate schedules, and spending limits set by higher-level management.
E. Burden of Proof
Under settled FLSA jurisprudence, the employer bears the burden of establishing that an employee falls within an exemption to the Act's overtime requirements. See 29 C.F.R. § 541.2. Moreover, exemptions under the FLSA are construed narrowly against the employer seeking to assert them and in favor of the employees whom the Act is intended to protect.
The Eleventh Circuit has consistently adhered to this principle, holding that the employer must prove that the employee "plainly and unmistakably" falls within the exemption's terms. This standard requires more than a showing that an exemption is plausible; the employer must demonstrate by a preponderance of the evidence that all elements of the claimed exemption are satisfied for each employee at issue.
Critically, job titles and written job descriptions are not dispositive of exempt status. The regulations expressly provide that an employee's exempt or non-exempt status must be determined on the basis of "the employee's actual job duties," not on the basis of the employee's job title or a generic written description of the position. 29 C.F.R. § 541.2. Where the actual day-to-day duties differ from the written job description — as our preliminary review suggests may be the case with several of VHG's lead/senior roles — it is the actual duties that control.
IV. Application to VHG Lead/Senior Role Classifications
In this section, I apply the legal framework set forth above to each of the six lead/senior role categories at issue. For each role, I analyze the compensation structure (salary-basis and salary-level tests) and the duties (both prongs of the duties test), and provide a preliminary risk assessment.
A. Lead Front-Desk Associate
Compensation structure. Preliminary payroll data from Luminos TimeTrack indicates that Lead Front-Desk Associates at the seven at-issue properties are paid a fixed weekly amount ranging from $740 to $825 per week, depending on the property. These amounts exceed the applicable minimum salary threshold of $684 per week. However, a significant question remains as to whether the pay is truly structured on a salary basis — that is, a predetermined amount not subject to reduction because of variations in the quality or quantity of work — or whether it is computed on an hourly basis with a guaranteed minimum that merely produces weekly compensation above the threshold. Information from Enrique J. Fuentes during our February 6, 2026 interview suggests that at least some properties may have retained hourly time-tracking for these employees following the January 2023 reclassification, which, if confirmed, would cast serious doubt on whether the salary-basis test is satisfied. This issue requires verification through a review of the Luminos TimeTrack system configuration, as discussed in Section VIII.A below. If pay is in fact computed on an hourly basis, the salary-basis test fails under 29 C.F.R. § 541.602 regardless of whether the weekly total exceeds the minimum threshold.
Duties analysis — "directly related to management or general business operations." Based on the written job description for this role and information obtained from Ms. Whitfield and Mr. Fuentes, the primary duties of the Lead Front-Desk Associate include: checking guests in and out of the hotel; handling guest complaints and service-recovery situations at the front desk; assigning room keys and processing payments; coordinating with the housekeeping department regarding room readiness and availability; and assisting with the compilation of daily occupancy reports. There is a supervisory overlay to the role — the Lead Front-Desk Associate is expected to assign tasks to other front-desk associates during the shift, such as directing a co-worker to handle a particular guest or manage a particular phone line. However, the lead associate typically performs the same front-desk duties as non-lead associates for the substantial majority of the shift, with the "lead" function operating more as a first-among-equals arrangement than as a distinct administrative role.
These duties are quintessential production-side functions of a hotel. Checking guests in and out, processing payments, handling complaints, and coordinating room status are the core service-delivery activities for which the hotel exists. While some of these duties involve interaction with guests and require interpersonal skill, they do not constitute work "directly related to the management or general business operations" of the employer. The coordination with housekeeping regarding room readiness is an operational function, not an administrative one — it is part of the production process of making rooms available for guests, not part of the administrative infrastructure that keeps the business running. The compilation of daily occupancy reports is closer to an administrative function, but it appears to represent a minor portion of the Lead Front-Desk Associate's total working time and is better characterized as data recording or tabulation than as work requiring the exercise of discretion regarding matters of significance.
Discretion and independent judgment. The Lead Front-Desk Associate exercises limited discretion. The employee follows established check-in and check-out procedures, applies standard rate schedules, processes payments according to established protocols, and escalates non-routine guest issues to the front-office manager. The Lead Front-Desk Associate does have some authority to issue room credits or complimentary upgrades to address guest complaints, but this authority is limited to a maximum of $50 per incident pursuant to VHG's Guest Service Recovery Policy, and any credit or upgrade exceeding that amount requires approval from the front-office manager or the property general manager. This is a low-dollar-value, narrowly constrained authority that is unlikely to constitute the exercise of "discretion and independent judgment with respect to matters of significance" as contemplated by 29 C.F.R. § 541.202. The employee is applying a well-established technique (the service-recovery policy) within a fixed parameter ($50), not formulating, interpreting, or implementing management policies.
Assessment: HIGH RISK of misclassification. The primary duties of the Lead Front-Desk Associate are production-side guest-service functions, not administrative functions directly related to management or general business operations. The discretion exercised by these employees is constrained, routine, and of limited consequence. The salary-basis question compounds the risk. This classification is likely indefensible under the administrative exemption, and I anticipate that a court or the DOL would find these employees to be non-exempt.
B. Senior Concierge
Compensation structure. Senior Concierges at the five properties where this role exists are paid between $700 and $780 per week. These amounts exceed the $684/week salary-level threshold, but the same salary-basis inquiry described above applies — we must verify whether the pay is computed on a true salary basis or on an hourly basis with a guaranteed minimum. An additional complication arises from the fact that Senior Concierges at several VHG properties participate in tip pools. This raises two concerns: first, whether tip income is being improperly counted toward the salary threshold, which would be impermissible under DOL regulations; and second, whether participation in a tip pool is itself inconsistent with exempt status, insofar as it suggests that the employee is performing tipped service work (i.e., production work) rather than administrative work. While the regulations do not expressly prohibit exempt employees from receiving tips, the receipt of tips through a pooling arrangement is atypical for administrative employees and may be viewed as indicative of the employee's actual role.
Duties analysis — "directly related to management or general business operations." The primary duties of the Senior Concierge include recommending restaurants and entertainment options to guests, booking tours and transportation, arranging special requests (e.g., floral arrangements, spa appointments, surprise celebrations), and maintaining relationships with local vendors and service providers who supply these guest amenities. These duties are predominantly guest-service functions — they involve the direct delivery of the hospitality experience that VHG's guests are paying for. The Senior Concierge role does include some components that have an arguably administrative character, such as negotiating agreements with local tour operators and activity providers, managing a small vendor budget for guest-experience offerings, and, at certain properties, preparing reports on guest-satisfaction metrics related to concierge services. However, based on information from Ms. Whitfield, these arguably administrative components appear to represent a minor portion of the Senior Concierge's total working time — likely 15 to 25 percent — with the substantial majority of the workday devoted to direct guest interaction and service arrangement.
Discretion and independent judgment. The Senior Concierge exercises a moderate degree of judgment in certain respects. The employee selects vendors and customizes guest experiences based on individual guest preferences and needs, and may exercise some creativity in designing unique guest offerings. However, these decisions are typically governed by pre-approved vendor lists maintained by the property's Guest Experience Director, spending limits set by property management, and established service standards. The Senior Concierge does not formulate management policies, set budgets, or make decisions that commit the employer on matters of significant financial impact. The discretion exercised is more akin to the use of skill in applying well-established techniques and guidelines to individual situations — the hallmark of skilled production work — than to the exercise of discretion and independent judgment on matters of significance as contemplated by the administrative exemption.
Assessment: MODERATE-TO-HIGH RISK. The production-side nature of the Senior Concierge's core duties weighs heavily against exempt classification under the administrative exemption. While there are some elements of vendor management and budget responsibility that could be characterized as administrative, these appear to be secondary to the employee's primary duty of providing direct guest services. The tip-pool participation further complicates the analysis and tends to undermine the administrative characterization. On balance, I believe this classification presents substantial risk, though it is marginally more defensible than the Lead Front-Desk Associate classification due to the vendor-management and budgetary components.
C. Lead Housekeeping Coordinator
Compensation structure. Lead Housekeeping Coordinators at the seven at-issue properties are paid between $690 and $750 per week. At the low end of this range, the compensation barely exceeds the $684/week salary-level threshold, leaving virtually no margin for error. If impermissible deductions have been made, or if pay has fluctuated below the threshold in any workweek due to the application of an hourly pay methodology, the salary-level test fails. The same salary-basis concerns identified for the other roles apply with equal force here, and indeed the hourly-origin nature of this role makes the salary-basis question particularly acute.
Duties analysis — "directly related to management or general business operations." The primary duties of the Lead Housekeeping Coordinator include assigning room-cleaning tasks to housekeepers at the beginning of each shift, inspecting cleaned rooms for quality and completeness according to a standardized checklist, restocking supply closets with cleaning materials and guest amenities, communicating with the front desk regarding room status (clean, dirty, inspected, out of order), and, at most properties, personally cleaning rooms during high-occupancy periods or when the housekeeping staff is short-handed. The "Coordinator" title may suggest an administrative function, but the actual duties are fundamentally operational and hands-on. This role is squarely within the production side of the administrative/production dichotomy. The Lead Housekeeping Coordinator is doing the same work as the housekeepers — cleaning rooms, restocking supplies — with the added responsibility of task assignment and quality inspection. Room-cleaning is the quintessential production function of a hotel, and assigning and inspecting that work does not transform it into administrative work "directly related to the management or general business operations" of the employer.
Ms. Whitfield confirmed during our interview that the Lead Housekeeping Coordinator personally cleans rooms "when needed," which she characterized as occurring "particularly during peak season, holiday weekends, and whenever we're understaffed, which is frequently." This admission is significant because it confirms that hands-on production work is a regular and substantial part of the Lead Housekeeping Coordinator's duties, not merely an occasional or incidental occurrence.
Discretion and independent judgment. The Lead Housekeeping Coordinator exercises minimal discretion. Room-cleaning assignments are based on a daily room-assignment board prepared by the Executive Housekeeper (a separate, higher-level position), and the Lead Housekeeping Coordinator distributes assignments in accordance with that plan. The Lead Housekeeping Coordinator does not set staffing levels, participate in budget decisions, or establish quality standards — these functions are performed by the Executive Housekeeper and the Director of Rooms. Room inspections follow a standardized checklist, and deviations from the checklist are escalated to the Executive Housekeeper. The Lead Housekeeping Coordinator has no authority to hire, fire, or discipline housekeeping staff, and does not participate in performance evaluations.
Assessment: HIGH RISK of misclassification. This role is almost certainly non-exempt. The duties are production-side and involve little meaningful discretion. The employee performs the same core work as the non-exempt housekeepers, with an overlay of routine task assignment and checklist-based inspection that does not satisfy either prong of the administrative-exemption duties test. The compensation at the lower end of the range ($690/week) is perilously close to the salary-level threshold, and the salary-basis question compounds the problem. This is among the most vulnerable of the six classifications at issue, and I would expect a court to find misclassification with a high degree of confidence.
D. Senior Banquet Captain
Compensation structure. Senior Banquet Captains at the four properties where this role exists (Verimark Regency Tampa, Verimark Grand Orlando, Verimark Resort & Spa Boca Raton, and Verimark Oceanview Fort Lauderdale) are paid between $750 and $850 per week. These amounts comfortably exceed the $684/week salary-level threshold, and the margin above the threshold is more substantial than for most of the other roles at issue. The salary-basis inquiry remains relevant but may be less acute for this role, as the higher compensation levels suggest that VHG may have been more intentional about structuring these positions as salaried exempt. This must nonetheless be verified through Luminos TimeTrack data.
Duties analysis — "directly related to management or general business operations." The primary duties of the Senior Banquet Captain include managing banquet service during events, directing and coordinating wait staff during event service, coordinating with the kitchen regarding meal timing and plate presentation, ensuring guest satisfaction during banquet events, and overseeing event setup and breakdown. The Senior Banquet Captain physically participates in service — pouring beverages, carrying trays, setting tables, and breaking down event spaces. The job description also includes some planning functions: the Senior Banquet Captain is expected to attend pre-event client meetings alongside the Catering & Events Manager to review menus, layouts, and service flow, and may make suggestions regarding table arrangements and service sequences.
While the planning and client-interaction components of this role have an arguably administrative flavor, they are typically performed alongside the Catering & Events Manager, who retains decision-making authority on all substantive matters (menu selection, pricing, staffing levels, event design). The Senior Banquet Captain's role in these meetings appears to be primarily informational and execution-oriented — the employee contributes operational knowledge about service logistics but does not independently formulate event plans or commit the employer on matters of financial significance. Moreover, the planning functions appear to occupy a minor portion of the Senior Banquet Captain's total working time, with the substantial majority devoted to physical event service and setup/breakdown activities.
The physical, hands-on nature of the banquet-service work places this role firmly on the production side of the administrative/production dichotomy. Delivering banquet service is a core revenue-generating activity of the hotel — it is the "product" that the employer sells to event clients — and the Senior Banquet Captain's primary duty is to execute that service, not to administer the business.
Discretion and independent judgment. The Senior Banquet Captain exercises limited-to-moderate discretion. During events, the employee must make real-time judgment calls regarding service timing, guest accommodations (e.g., handling dietary restrictions or last-minute seating changes), and staff deployment. These decisions require skill and experience, and they are not purely mechanical. However, the major decisions governing banquet operations — menu design, pricing, staffing levels, vendor selection, client relationship management — are made by the Catering & Events Manager and the property's Director of Food & Beverage. The Senior Banquet Captain executes plans established by others rather than formulating plans independently.
The discretion exercised by the Senior Banquet Captain is better characterized as the application of skilled techniques within established parameters than as the exercise of independent judgment on matters of significance. The real-time decisions made during event service, while requiring experience and good judgment, are analogous to the operational decisions made by any skilled production worker in the course of performing their job — a distinction that the regulations at 29 C.F.R. § 541.202(e) expressly draw.
Assessment: MODERATE-TO-HIGH RISK. While the Senior Banquet Captain role has somewhat stronger administrative characteristics than the other high-risk roles — particularly the client-interaction and planning components — the predominantly production-side nature of the work and the limited scope of the employee's independent decision-making authority undermine the exemption. The classification is defensible only if VHG can demonstrate that the planning and client-management functions occupy a sufficiently significant portion of the employee's working time and involve genuine discretion — a showing that appears difficult to make on the current factual record. Further factual development through property-level interviews may alter this assessment, but my preliminary view leans toward misclassification.
E. Lead Food & Beverage Attendant
Compensation structure. Lead Food & Beverage Attendants are paid between $695 and $760 per week across the six properties where this role exists. These amounts meet the $684/week salary-level threshold at most properties, but the lower end of the range provides minimal headroom. The same salary-basis concerns apply, and the hourly-origin nature of this role makes the salary-basis question particularly important. Additionally, depending on the property, Lead Food & Beverage Attendants may participate in tip pools, raising concerns similar to those identified for the Senior Concierge.
Duties analysis — "directly related to management or general business operations." The primary duties of the Lead Food & Beverage Attendant include overseeing restaurant and bar service during assigned shifts, seating guests, taking food and beverage orders, serving food and beverages, preparing certain beverages (particularly at properties without a dedicated bartender on every shift), closing out registers at the end of shifts, and performing opening and closing procedures. The "lead" component of the role involves assigning server stations at the beginning of each shift, handling shift swaps among food and beverage staff, and serving as the point of escalation for guest complaints during the shift.
These duties are unambiguously production-side work. The Lead Food & Beverage Attendant is doing the same work as a server or food and beverage attendant — taking orders, delivering food, mixing drinks, processing payments — with additional responsibilities for station assignment and complaint handling. The station-assignment and shift-management functions are routine supervisory tasks, not administrative functions directly related to management or general business operations. The Lead Food & Beverage Attendant does not participate in menu development, pricing decisions, vendor selection, marketing, budgeting, or any other function that would place the role on the administrative side of the production/administration dichotomy.
Discretion and independent judgment. The Lead Food & Beverage Attendant exercises minimal discretion. The employee follows established menus, pricing structures, portion standards, and service protocols. Station assignments are made based on a rotation schedule or seniority system, not on the exercise of independent judgment. Guest complaints are handled according to a service-recovery protocol, with escalation to the restaurant manager or food and beverage director for issues exceeding the employee's authority. The employee does not set policy, does not participate in budget decisions, and does not have authority to bind the employer on matters of financial significance.
Assessment: HIGH RISK of misclassification. This role is clearly production-side work with insufficient discretion to satisfy the duties test. The "lead" designation adds a layer of routine supervisory responsibility to what is otherwise a standard food-service position, but supervisory responsibility alone does not transform production work into administrative work. The administrative exemption is not the correct vehicle for exempting employees with supervisory duties — that function is served by the executive exemption, which has its own distinct requirements (including supervision of two or more full-time-equivalent employees and authority to hire, fire, or effectively recommend such actions). This classification is likely indefensible.
F. Senior Maintenance Technician
Compensation structure. Senior Maintenance Technicians at all seven at-issue properties are paid between $780 and $870 per week. This range comfortably exceeds the $684/week salary-level threshold, and the salary-basis concern is less acute for this role than for the others because the higher compensation levels and the specialized nature of the work suggest that VHG may have more clearly structured this position as a salaried role. Nonetheless, the salary-basis question must be verified, particularly given the hourly-origin history shared by all six role categories.
Duties analysis — "directly related to management or general business operations." The primary duties of the Senior Maintenance Technician include performing preventive maintenance on building systems and equipment (HVAC, plumbing, electrical, fire safety), responding to repair requests submitted by other departments or guests, conducting regular property inspections to identify maintenance needs, performing general carpentry and painting, and maintaining maintenance logs. The Senior Maintenance Technician also has some planning and coordination duties, including scheduling the preventive-maintenance calendar for the property, ordering parts and supplies within an approved budget, coordinating with third-party contractors on specialized repairs (e.g., elevator service, pool equipment), and, in some cases, assisting the Director of Engineering in preparing capital-expenditure requests for major equipment replacements.
The planning, budgetary, and contractor-coordination duties have a more arguable administrative character than the duties of the other five roles at issue. The Senior Maintenance Technician exercises some genuine authority in determining maintenance priorities, allocating resources, and managing vendor relationships. However, the predominant nature of the work is technical and manual — the Senior Maintenance Technician spends the majority of working time physically performing repairs, conducting hands-on inspections, and carrying out preventive-maintenance tasks. This is skilled trades work, not office or non-manual work.
The DOL has generally taken the position that technicians and skilled-trades workers performing hands-on repair and maintenance work are engaged in production activities, not administrative activities, even if they exercise significant technical skill and judgment in diagnosing problems and selecting repair methods. The "office or non-manual work" requirement of 29 C.F.R. § 541.200(a)(2) is itself an obstacle, as the Senior Maintenance Technician's work is predominantly manual in nature. While the regulation does not require that all of an employee's work be non-manual, the "primary duty" must consist of non-manual work, and physical repair and maintenance activities are by definition manual labor.
Discretion and independent judgment. The Senior Maintenance Technician exercises a moderate degree of discretion. The employee independently diagnoses equipment malfunctions, determines repair methods, prioritizes competing maintenance requests, and manages a parts-and-supplies budget. These decisions require technical expertise and have operational consequences for the property. However, the discretion exercised is predominantly technical in nature — it involves the application of specialized knowledge and skill to solve concrete problems — rather than the type of business-judgment discretion contemplated by the administrative exemption. The regulation at 29 C.F.R. § 541.202(e) distinguishes between the exercise of discretion and independent judgment on "matters of significance" and the use of "skill in applying well-established techniques, procedures, or specific standards described in manuals or other sources." The Senior Maintenance Technician's diagnostic and repair decisions, while requiring skill and experience, are more closely aligned with the latter category.
The Senior Maintenance Technician does not formulate management policies, does not participate in strategic planning, does not negotiate contracts on behalf of the employer (coordination with third-party contractors occurs within pre-established vendor relationships and spending limits), and does not make decisions that commit the employer on matters of significant financial impact (capital-expenditure requests are prepared by the employee but approved by the Director of Engineering and property management).
Assessment: MODERATE RISK. The Senior Maintenance Technician is the strongest candidate for exemption among the six roles at issue, but the administrative exemption remains a difficult fit. The predominantly manual/technical nature of the duties and the DOL's consistent view that skilled-trades workers are production employees weigh against the administrative characterization. If VHG wishes to maintain exempt status for this role, the executive exemption under 29 C.F.R. § 541.100 may be a more promising avenue — but only if the Senior Maintenance Technician customarily and regularly supervises two or more full-time-equivalent employees and has the authority to hire, fire, or effectively recommend such personnel actions. That analysis is beyond the scope of this memorandum but should be undertaken as part of VHG's remediation planning.
V. Cross-Cutting Concerns
Several issues cut across all six role categories and warrant separate discussion.
A. Salary-Basis Deficiency — Hourly-Origin Pay Structures
As noted throughout Section IV, several of the lead/senior roles at issue were converted from hourly non-exempt classifications to salaried exempt classifications in or around January 2023, in connection with a VHG-wide job-code restructuring. Information obtained from Enrique J. Fuentes during our February 6, 2026 interview raises concerns about whether this conversion was properly implemented at the payroll-system level.
Specifically, we need to verify whether the payroll conversion in the Luminos TimeTrack system (account LTT-VHG-2022-0041) was configured to treat these employees as salaried-exempt — i.e., with no time-punch requirement and no overtime calculation — or whether the system continued to track these employees on an hourly basis with a guaranteed weekly minimum. If the latter, the compensation structure may fail the salary-basis test regardless of the job title or the label applied to the pay in VHG's internal records.
Mr. Fuentes indicated during our interview that "the time clocks were still being used by some of these people at some properties" following the reclassification, but he was uncertain whether this was by design (e.g., for scheduling and building-access purposes) or because the payroll system continued to require time punches for these job codes. He further indicated that he was not personally involved in the January 2023 reclassification and that the decision was made by his predecessor, who is no longer with VHG. This gap in institutional knowledge is concerning and underscores the need for a thorough review of the Luminos TimeTrack configuration.
If employees in these roles are still tracked with hourly time punches and their pay fluctuates based on hours worked, the salary-basis test fails. Even if pay does not fluctuate — i.e., even if the employees receive the same weekly amount regardless of hours — the continued use of hourly time-tracking may be viewed as evidence that the employer regards the employee as hourly, which could undermine the salary-basis showing. This is a factual question that can only be resolved through a detailed review of the payroll-system configuration and actual pay records.
B. The "Primary Duty" Standard
Under 29 C.F.R. § 541.700, the term "primary duty" means "the principal, main, major, or most important duty that the employee performs." The regulation provides that time spent performing exempt work can be a useful guide but is not the sole test of the primary-duty inquiry. An employee who spends more than 50 percent of working time performing exempt work will "generally" satisfy the primary-duty requirement, but this is not an absolute rule — an employee may satisfy the primary-duty test with less than 50 percent of time spent on exempt work if other factors support the determination (e.g., the relative importance of exempt duties, the employee's relative freedom from supervision, the relationship between the exempt salary and wages paid to non-exempt employees performing similar work).
Conversely, an employee who spends less than 50 percent of working time on exempt duties may fail the primary-duty test if the exempt duties are not the employee's "principal, main, major, or most important" duty, even if the employee has significant exempt responsibilities.
Observation: Based on our initial review of job descriptions and information from the February 5–6 interviews, the lead/senior employees in most of the six role categories appear to spend approximately 70 to 85 percent of their working time on production-side tasks (direct guest service, room cleaning, food and beverage service, physical maintenance) and only approximately 15 to 30 percent of their time on duties that could arguably be characterized as administrative (task assignment, scheduling coordination, vendor interaction, report preparation). This allocation strongly suggests that the primary duty of these employees is production work, not administrative work. Even considering the qualitative factors identified in 29 C.F.R. § 541.700 — relative importance, freedom from supervision, and compensation comparison — the overwhelming proportion of production-side time makes it very difficult to argue that administrative duties constitute the "principal, main, major, or most important" duty of these employees.
This assessment is based on preliminary information and may be refined through property-level interviews with general managers and department heads. However, I do not expect further factual development to fundamentally alter the picture for most of these roles.
C. Property-Level Variations
The duties of lead/senior employees may vary materially across VHG's seven at-issue properties. Larger properties, such as Verimark Grand Orlando (485 rooms) and Verimark Resort & Spa Boca Raton (390 rooms), employ more staff in each department, which may allow lead/senior employees to devote a greater proportion of their time to coordination, supervision, and administrative tasks and less time to hands-on production work. Conversely, smaller properties, such as Verimark Key West Collection (150 rooms) and Verimark Shores Clearwater (210 rooms), have smaller staffs and likely require lead/senior employees to spend more of their time performing the same production tasks as non-lead employees.
This variation has two implications for VHG's defense. First, any defense based on the administrative exemption would need to be supported on a property-by-property, role-by-role basis. Aggregate characterizations that average duties across all seven properties will not suffice — each employee's exempt status must be assessed based on that employee's actual duties at the specific property where the employee works. Second, the property-level variation creates a tension in VHG's defensive posture: if VHG argues that duties vary materially across properties (which may be factually accurate and may support opposition to collective-action conditional certification), it simultaneously undermines the uniform exemption defense, because the exemption would need to be established independently for each property. This tension is addressed further in Section VIII.D below.
D. Willfulness. The FLSA provides a two-year statute of limitations for non-willful violations and a three-year statute of limitations for willful violations. 29 U.S.C. § 255(a). A violation is "willful" if the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the FLSA. Under Eleventh Circuit precedent, reckless disregard may be established by showing that the employer failed to make adequate inquiry into whether its pay practices complied with the FLSA, even if the employer did not have actual knowledge of a violation.
The January 2023 reclassification is the pivotal event for the willfulness analysis. If VHG undertook the reclassification without obtaining a legal opinion or conducting a compliance analysis regarding the applicability of the administrative exemption to these roles, plaintiff's counsel will argue that VHG acted with reckless disregard for its FLSA obligations. This argument would be strengthened by evidence that: (i) the roles had previously been classified as non-exempt for years, suggesting that VHG or its predecessors had previously determined that the exemption did not apply; (ii) the reclassification coincided with a general "job-code restructuring," which might suggest that the decision was driven by cost or administrative considerations rather than a genuine assessment of exemption eligibility; and (iii) VHG did not train property-level managers on the requirements for maintaining exempt status (e.g., ensuring that exempt employees are not subject to impermissible deductions).
We need to determine whether VHG obtained legal advice regarding the reclassification at the time it was implemented, and, if so, from whom. If legal advice was obtained and was reasonably relied upon, this may negate willfulness (though it does not necessarily negate liability). If no legal advice was obtained, the willfulness finding becomes substantially more likely, which would extend the limitations period from two years to three years and correspondingly increase the exposure.
E. Potential Collective-Action Implications
The FLSA permits employees to bring suit on behalf of themselves and "other employees similarly situated" through a collective action under 29 U.S.C. § 216(b). Unlike a class action under Federal Rule of Civil Procedure 23, an FLSA collectiv