Labor Department’s FLSA Compliance Focus Now Targeting Hotel Industry

By John E. Thompson

One of the U.S. Department of Labor‘s continuing federal Fair Labor Standards Act enforcement initiatives targets hotels and motels.

Officials are following-through on their 2010 warning that they see the hospitality industry as presenting a “high risk” for non-compliance.

Here are some recent outcomes:

  • The Department of Labor announced that a company operating hotels in New Mexico and Texas agreed to pay nearly $79,000 in FLSA back wages to dishwashers, bartenders, wait and bell staff, housekeeping employees, and maintenance workers. Some of the alleged violations involved paying only a flat rate of $3.00 per room cleaned without regard to whether the housekeeper worked more than 40 hours in a workweek; failing to figure overtime premium on employees’ incentive payments; and calculating overtime pay based upon tipped employees‘ less-than-minimum-wage cash wages rather than upon the FLSA’s $7.25-per-hour minimum wage.
  • A Tennessee motel will tender nearly $52,000 in previously unpaid overtime wages, according to a Labor Department press release. The Wage and Hour Division asserted that employees had been paid only at straight-time rates for hours worked over 40 in a workweek. A Division official expressed the view that “[a] typical violation in the hotel and motel industry is the failure to pay required overtime premiums.”
  • A Florida hotel has paid almost $18,000 to resolve alleged FLSA violations arising from overtime work performed by workers assigned to its premises by a staffing company. The DOL contended that the workers were jointly employed by the hotel and the staffing company. Investigators asserted among other things that the workers’ services were carried out under the supervision and control of hotel management. The Division’s local District Director said, “Hotels and motels subject to the FLSA cannot use staffing companies to escape their responsibilities to classify and compensate employees properly for all hours worked.”

The risk is real

The Labor Department’s descriptions of its enforcement activities since 2009 differ from one account to the next.

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One press release says that the Wage and Hour Division has conducted nearly 4,000 industry investigations and has recovered over $12.4 million for more than 23,000 workers nationwide. Another published on the same date refers to almost 5,000 investigations, more than $15.1 million recovered, and over 28,000 affected workers.

Whatever the actual figures are, clearly the agency is devoting substantial resources to the effort to considerable effect. Industry employers should ensure without delay that their pay practices are in compliance.

This was originally published on Fisher & Phillips’ Wage and Hour Laws blog.

John Thompson is a partner in the Atlanta office of the law firm Fisher & Phillips. His practice focuses on wage and hour law, assisting employers in preventive efforts designed to ensure compliance, and he handles both investigations conducted by government agencies and litigation in the wage and hour area. John has served as a Special Assistant Attorney General for wage-hour matters for the State of Georgia. Contact him at jthompson@laborlawyers.com.

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