Category Archives: Employment Practices Liability
Hospitality Industry Risk Solutions: “2014 Hospitality Insurance & Loss Prevention Summit” On February 10 Presented By Petra Risk Solutions
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December 20, 2013 · 6:45 amHospitality Industry Employment Risks: Florida Hotel Settles Federal “Wage Violation” Investigation For $30,000 In Back Pay; Failed To Maintain Accurate Payroll Records
“Even when an employer contracts with a payroll service company, as this one did, the employer is required by federal labor laws to record and 
maintain accurate records of hours worked by employees. The employer is responsible for submitting accurate data for the preparation of employees’ paychecks,†said James Schmidt, director of the Wage and Hour Division’s Tampa District Office. “It is illegal for an employer to falsify the number of hours worked by employees.â€
The division has noticed the noncompliance in the hospitality industry and is concentrating its resources on investigating and remedying violations, informing workers of their rights and providing compliance assistance to employers. Since 2009, the division has concluded nearly 5,100 cases involving hotel and motel employers, resulting in more than $16.1 million in back wages for more than 30,000 workers nationwide.
Olympia Development Group LLC, doing business as Safety Harbor Resort and Spa in Tampa, has paid 37 employees $30,786 in back wages after an investigation by the Wage and Hour Division of the U.S. Department of Labor identified violations at the resort of the Fair Labor Standards Act’s overtime, minimum wage and record-keeping provisions.
The investigation disclosed that management changed employees’ time records, removing hours they had worked before and after their scheduled shifts, and deducting meal breaks, regardless of whether those breaks had actually been taken. These deductions from employees’ timecards, in addition to violating record-keeping provisions, resulted in both minimum wage and overtime violations when hours worked went unpaid.    Additionally, tipped employees were paid in violation of FLSA minimum wage requirements when, in addition to their direct cash wages they received from the employer, they did not collect enough in tips to earn minimum wage, yet the employer failed to make up the difference. Tipped employees were also paid in violation of FLSA overtime requirements when their overtime rates were based on time and one-half their direct cash wages rather than the full minimum wage of $7.25 per hour.
The employer has paid all the back wages found due and has agreed to comply with the FLSA in the future.
The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour, as well as time and one-half their regular rates of pay for hours worked over 40 per week. In general, hours worked includes all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work, from the beginning of the first principal work activity to the end of the last principal activity of the workday. Additionally, the law requires that accurate records of employee’s wages, hours and other conditions of employment be maintained.
The Wage and Hour Division’s Tampa District Office can be reached at 813-288-1242. Information on the FLSA and other federal labor laws is available by calling the division’s toll-free helpline at 866-4US-WAGE (487-9243) or by visiting http://www.dol.gov/whd.
For more: http://www.dol.gov/whd/media/press/whdpressVB3.asp?pressdoc=Southeast/20131210.xml
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Hospitality Industry Employment Risks: New York Restaurants Settle Federal “Wage Violation” Lawsuit For $288,000; Failed To Pay Workers Overtime, Operated “Illegal Tip Pool”
“…The restaurants’ failure to pay them overtime dropped their pay below the federal minimum of $7.25 an hour, the department said. Employees covered by federal minimum-wage and overtime laws must be paid at least 11/2 times their regular hourly wage they when they work more than 40 hours a week…the restaurants operated an “illegal tip pool” in which tipped employees were forced to share their tips with the kitchen staff…”
Two Nassau sushi restaurants and an executive have agreed to pay more than $288,000 to settle federal charges that they “willfully” failed to pay 70 workers minimum wage and overtime, the U.S. Labor Department said.
Xaga Sushi in Merrick and Hewlett, and their president, Mei Yu Zhang, agreed to pay $261,887 in back wages and $26,322 in penalties, the Labor Department announced Monday.
The department contends the restaurants failed to pay the servers, busboys and kitchen staff overtime, even when some employees regularly worked as many as 50 hours a week. Instead, they were paid a flat monthly rate no matter how many hours they worked, the department said.
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Hospitality Industry Legal Risks: National Restaurant Chain Settles “Age Discrimination” Lawsuit With EEOC For $575,000; “Discriminatory Barriers To Hiring” For Applicants Over 40
Ruby Tuesday, Inc. will pay $575,000 and provide significant equitable relief to settle a class age discrimination lawsuit filed by the U.S Equal 
Employment Opportunity Commission (EEOC), the agency announced today. The EEOC alleged that Ruby Tuesday engaged in a pattern or practice of age discrimination against job applicants who were 40 years of age or older at six of the chain’s restaurants located in West Mifflin, Greensburg, Altoona, Du Bois, and Indiana, Pa., and in Beachwood, Ohio, in violation of the Age Discrimination in Employment Act of 1967 (ADEA).
The restaurant chain also failed to preserve employment records, including employment applications, as required by the ADEA and EEOC regulations, the EEOC charged in its lawsuit filed in U.S. District Court of the Western District of Pennsylvania (EEOC v. Ruby Tuesday, Inc., Civil Action No. 09-1330).
“This case demonstrates the agency’s ongoing commitment to challenge discriminatory barriers to hiring,” said EEOC General Counsel David Lopez. “Vigorous law enforcement efforts on behalf of older workers are critical to the EEOC’s mission to eradicate barriers to employment.”
EEOC District Director Spencer H. Lewis, Jr. said, “The EEOC is committed to combatting unlawful age discrimination in the workplace and will hold employers responsible if they make hiring decisions based on age rather than the applicant’s ability to do the job.”
In addition to the $575,000 in monetary relief, the three-and-one-half-year consent decree resolving the lawsuit enjoins Ruby Tuesday from engaging in future age discrimination or retaliation and provides substantial non-monetary relief at the affected Ruby Tuesday locations.
Among other things, Ruby Tuesday, Inc. will:
- Implement numerical goals for hiring and recruitment of job applicants age 40 and older at the affected locations;
- Review its job advertisements to make certain they do not violate the ADEA’s prohibitions against age discrimination;
- Conduct audits, including random reviews of hiring decisions, to ensure non-discrimination and compliance with the terms of the consent decree;
- Evaluate the job performance of people with hiring authority for the six stores named in the consent decree and set their compensation (including bonuses), in part, based on their degree of success in helping Ruby Tuesday achieve its goals of ensuring that its recruitment and hiring practices provide equal employment opportunities for people who are 40 or older;
- Designate a decree compliance monitor for oversight of compliance with the requirements of the ADEA and the terms of the consent decree;
- Provide extensive training on the requirements of the ADEA and the consent decree to the decree compliance monitor, human resources personnel and hiring authorities of the six stores named in the consent decree; and
- Report to the EEOC and keep records about its hiring practices and compliance with the consent decree.
Philadelphia Regional Attorney Debra M. Lawrence added, “We are pleased that Ruby Tuesday worked with us to craft a comprehensive settlement that will benefit all employees and applicants. In addition to the monetary compensation for the class members, the extensive training and equitable measures are designed to improve recruitment and hiring of older workers and protect all applicants from age discrimination.”
According to its website, www.rubytuesday.com, Ruby Tuesday, Inc. has nearly 800 company-owned and franchised restaurants and more than 40,000 corporate and franchise team members.
Eliminating barriers in recruitment and hiring, especially class-based recruitment and hiring practices that discriminate against racial, ethnic and religious groups, older workers, women, and people with disabilities, is one of six national priorities identified by the EEOC’s Strategic Enforcement Plan.
The Philadelphia District Office of the EEOC oversees Pennsylvania, Maryland, Delaware, West Virginia and parts of New Jersey and Ohio. The EEOC enforces federal laws prohibiting employment discrimination. Further information about the agency is available at its website, www.eeoc.gov.
For more: http://www.eeoc.gov/eeoc/newsroom/release/12-9-13.cfm
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Hospitality Industry Legal Risks: Pennsylvania Restaurant Sued By Worker For “Religious Discrimination”; Claims New Manager Reduced Hours, Created Hostile Work Environment
“…At the start of her employment, (the plaintiff) informed the defendant that she could not work on Thursdays and Sundays due to her religious 
beliefs…In June 2011, after a woman identified as Aretha Foster became the plaintiff’s store manager, Matthews had her hours reduced to 15 a week from 35…The complaint alleges that Foster also subjected the plaintiff to an increasingly hostile work environment, that the supervisor would deny Matthews her breaks, and that the woman would verbally abuse the plaintiff in front of other staff members…”
A Jehovah’s Witness from southeastern Pennsylvania is suing a Louisiana-based restaurant over allegations that the company discriminated against her because of her religion. Jonna Matthews, who currently resides in Pottstown, Montgomery County, filed suit at the U.S. District Court in Philadelphia on Nov. 26 against America’s Pizza Co. over the allegedly discriminatory treatment she received at the hands of the defendant while she was employed as a customer service representative beginning in early February 2011.
The plaintiff, however, maintains that she never asked for the reduction in hours and was still available to work Mondays, Tuesdays, Wednesdays, Fridays and Saturdays. The defendant stands accused of violating Title VII of the Civil Rights Act, which bars discrimination on the basis of religion.
“Plaintiff suffered adverse job actions, including, but not limited to, disciplines, denials of various opportunities, and termination,†the suit states.
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Hospitality Industry Legal Risks: “How To Serve Alcohol At A Company Party Without Getting Sued” By Tom Posey
How to Serve Alcohol at a Company Party Without Getting Sued
By Tom Posey, Partner, Faegre Baker Daniels
With the holidays right around the corner, many businesses will host festive company outings and events for their employees, including parties at the office—and often these celebrations include alcohol.
Employers need to understand the legal parameters of having alcohol in the workplace in order to establish a safe, responsible and enjoyable work environment for their employees. A few common questions from employers at this time of year are:
http://www.faegrebd.com/tom-posey
Some states have laws that govern “social host liability.” Through these laws, bartenders or social hosts can be held liable for events that result from over-serving someone (e.g. accidents, injuries, etc.).  These laws would make the organization responsible for monitoring consumption and cutting off drinking by anyone who becomes intoxicated, so be aware of the laws in your jurisdiction.
If some of our employees are under the legal drinking age, can we still serve alcohol?
Employers must ensure that no one underage has access to alcohol. If alcohol is served to a minor, the employer can be subject to the same stiff fines and penalties that a store or bar that serves a minor would face. Â Accordingly, if underage employees will be attending the party, employers must be vigilant in making sure that they are not served or allowed access to alcoholic beverages.
If an employee has too much to drink and has an accident, it is still covered by our insurance, right?
Employers who provide alcohol to their employees may unwittingly negate coverage under their general liability insurance policies and be on the hook for costs associated with alcohol-related incidents or injuries, so be aware of the limitations and exceptions applicable to your organization’s employee-related policies.
Any other legal risks the organization might face if alcohol will be served at holiday functions?
There is an increased risk of sexual harassment-related complaints that result from company events where alcohol is present (e.g. the stereotypical office holiday party 
that is always satirized in movies and TV shows). Remember that even though the function might be held outside normal working hours, employees are still afforded protection from harassment or other inappropriate conduct that might be directed at them by their colleagues.
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Hospitality Industry Employment Risks: Hawaii Restaurant Settles EEOC “Sexual Harassment And Retaliation” Lawsuit For $350,000; Young Female Workers Assigned Less Favorable Shifts
“…The federal agency filed suit in 2011, later amending its complaint to charge that at least 10 female staffers were sexually harassed by several male employees, including managers…The agency further alleged that some employees were subjected to retaliation after complaining about the alleged harassment. The EEOC also alleged that the women were also treated less favorably than men in the workplace: they were passed over for promotions, assigned less favorable shifts and earned less than their male counterparts…”
La Rana Hawaii, LLC, doing business as Señor Frog’s, a popular Mexican-themed restaurant and bar in Honolulu, will pay $350,000 to settle a lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC) on behalf of 13 female employees who were allegedly sexually harassed or retaliated against between 2007 and 2012, the federal agency announced today.
The EEOC alleged that the managers subjected employees to sexual comments, language and advances, and unwelcome physical contact. The alleged behavior violated Title VII of the Civil Rights Act of 1964. The EEOC filed suit (EEOC v. La Rana Hawaii, LLC dba Señor Frog’s & Altres, Inc., Case No. CV-11-00799 LEK BMK) after first attempting to resolve the matter through its conciliation process.
As part of the settlement announced today, the parties entered into a three-year consent decree requiring La Rana Hawaii, LLC to pay $350,000 to 13 female claimants. The company closed its Honolulu establishment in August 2012. Notwithstanding, if La Rana chooses to open another restaurant or chooses to reopen the Señor Frog’s in Hawaii, the consent decree requires substantial injunctive relief including the creation and distribution of an anti-harassment policy along with annual training for all restaurant employees to prevent future instances of sexual harassment, discrimination and retaliation. The EEOC will monitor compliance with the agreement.
Altres Inc., a Hawaii staffing company, was contracted by La Rana Hawaii to provide human resources services and oversee the company’s non-management staff during the time in question. The EEOC also named Altres in its lawsuit; Altres previously settled with the EEOC for $150,000 and injunctive relief, including EEO training for its employees.
“Our young workers are all too often the targets of the most insidious forms of sexual harassment, which can spread like wildfire at work,” said Anna Y. Park, regional attorney for the EEOC’s Los Angeles District Office, which includes Hawaii in its jurisdiction. “Employers who fail to fulfill their moral and legal obligation to prevent and immediately stop the sexual abuse of its young workers will answer to the EEOC.”
Timothy Riera, local director for the EEOC’s Honolulu Local Office, added, “The EEOC takes workplace harassment against young workers very seriously. Through our Youth@Work outreach, we aim to educate America’s next generation of workers on their right to work in an environment free of harassment and discrimination and their right to report such abuses without retaliation.”
For more:Â http://www.eeoc.gov/eeoc/newsroom/release/11-21-13.cfm
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Hospitality Law Insider: “Duty Of Care” That Businesses Owe To Mobile Employees From Stephen Barth Of HospitalityLawyer.com (Video)
In the second episode of Hospitality Law Insider, Stephen Barth covers some essential items to consider when adapting your travel risk plan to meet duty of care obligations. Learn more about how to deal with medical issues, evacuation considerations, and civil unrest.
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Hospitality Industry Legal Risks: California Hotel Employee Files “Racial Discrimination And Harassment” Lawsuit; Painter “Unjustly Fired”, Exposed To Unsafe Working Conditions
“…The suit claims (the plaintiff) was unjustly fired from his position after he was instructed to complete tasks typically subcontracted to outside vendors. The court filing also claims two of the hotel’s buildings had serious water damage and mold issues, but management failed to properly train employees or equip them with the right safety equipment, exposing Tobin to unsafe working conditions…”
Ronald Tobin, a former employee at Fess Parker DoubleTree Hilton, is suing the joint resort company and three of its supervisors for alleged discrimination and unfair business practices while he worked there as a painter for nearly three years.
Tobin, who’s African-American, claims he was subjected to discrimination and harassment at the DoubleTree because of his race, and that the human resources department neglected to investigate or address his complaints. During an event at the hotel, the lawsuit reads, one of Tobin’s supervisors talked about the chicken and watermelon being served, and used the phrases “you people†and “your food.†“[The supervisor] continued to state that he does not know why African-Americans refer to themselves that way when white people do not say ‘Caucasian-Americans,’†the filing reads. The lawsuit also states another employee regularly used the “n-word†without being reprimanded.
For more:Â http://independent.com/news/2013/nov/21/discrimination-doubletree/
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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.â€
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
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