Hospitality Industry Legal Risks: California Hotels Settle Federal “Wage Violation” Investigation For $60,000; Management Used Separate Payrolls For 53 Workers To Avoid Overtime Pay

Investigators determined that Miracle Springs Resort and Spa, and the nearby Desert Hot Springs Spa and Hotel, were under the same management, but they recorded employee hours on separate payrolls. When the affected employees’ hours were combined, the hours often totaled more than 40 per week, entitling the employees to overtime compensation for hours worked beyond 40 per week. Additionally, the employer would automatically deduct a 30-minute lunch break from some employees’ work hours, even when employees did not take the break.

The hotel Miracle Springs Resort and Spa of Desert Hot Springs has agreed to pay $59,790 in back wages to 53 employees, including maintenance and housekeeping employees, following an investigation by the U.S. Department of Labor’s Wage and Hour Division. The investigation found violations of the overtime provision of the Fair Labor Standards Act.

“Hotel owners and operators must ensure that their employees are properly compensated for all work hours,” said Kenneth Morrison, director of the Wage and Hour Division’s San Diego District Office. “We are pleased that these workers will be paid their rightful overtime wages and that the employer has agreed to make the appropriate changes to prevent future FLSA violations.”

The employer, along with paying the full back wages to the affected employees, will maintain future FLSA compliance by agreeing to combine the hours for employees who work at both hotel locations. The employer will deduct lunch breaks only when employees take the 30-minute break.

The hotel and motel industry employs many low-wage workers who, due to a lack of knowledge of the law or an unwillingness to exercise their rights, are vulnerable to disparate treatment and labor violations. The Wage and Hour Division is concerned about the noncompliance in this industry and is concentrating its resources on identifying and remedying violations, informing workers of their rights and providing compliance assistance to employers.

For more: http://www.dol.gov/whd/media/press/whdpressVB3.asp?pressdoc=Western/20131118.xml