Hospitality Industry Employment Risks: Hotel Management Compliance Audits Can Expose Potential Labor Department "Wage And Hour Division" Violations

• Make sure nonexempt employees are paid the required minimum wage. The current federal rate is $7.25 per hour (some jurisdictions require a higher rate).  Review deductions to ensure that they do not cut employees’ pay below the minimum wage.
• Be certain nonexempt employees are paid the required overtime. Ensure that all bonuses, shift differentials, service charges and other payments are properly included in computing overtime and that deductions do not improperly cut into overtime pay. 
• Pay special attention to whether nonexempt employees accurately record all worktime. Nonexempt employees must record pre- and post-shift work; shift-change overlap; opening or closing activities; compensable training time, meeting time, “on-call” work; and time spent doing work at home. Employees must record meal time and other non-compensable break time, and they must be paid when they do not take that time off. 
• Be sure that all “exempt” employees meet the requirements for exemption. Review the criteria defining who may be treated as exempt from the Fair Labor Standard Act’s minimum-wage and/or overtime requirements. “Salaried” employees are not necessarily exempt. Certain positions such as sous chefs and sales managers are vulnerable to challenge. 
• Make certain that exempt employees are paid on a salary basis. The most common FLSA exemptions require that such employees be paid on a “salary basis” and thus receive a fixed, predetermined amount for every workweek in which the employee performs any work, without regard to the number of days or hours worked or the quality of work. Salary deductions are very limited. 
• Strictly comply with child-labor restrictions. There is an age 16 limit for general occupations and an age 18 limit for occupations declared “hazardous” by the U.S. Secretary of Labor. 14 and 15 year olds may be employed in limited occupations, within strict hours and times of day limitations. Identify every employee who is 16 or 17, verify his or her age and exact duties. Identify every employee under 16, verify his or her age, exact duties and hours and times of work.
• Comply with all state and local wage-hour requirements. The FLSA does not preempt tougher state or local provisions. These other laws might include a higher minimum wage; daily overtime; minimum pay for reporting to work; more rigorous child-labor limitations; prohibitions on wage deductions; and time limits for paying employees who resign or are fired.

For more:  http://www.hotelnewsnow.com/Articles.aspx/7679/Government-audits-Get-your-house-in-order