Category Archives: Labor Issues

by | October 26, 2012 · 6:40 am

Hospitality Industry Legal Risks: Oklahoma Restaurant Group Sued By Labor Department For Violating Fair Labor Standards Act; Fixed Salaries Without Overtime And Tips Alleged

“…FLSA-covered employees, who in some cases worked as many as 72 hours in a week, were paid a fixed salary without overtime compensation for hours beyond 40 in a week. In addition to overtime violations, this practice resulted in minimum wage violations because employees did not always receive at least the federal minimum wage of $7.25 per hour. Investigators also found that wait personnel were required to turn their tips over to management at the end of every shift, which caused their pay to fall below the minimum wage. Finally, the employer did not keep proper records as required…”

The U.S. Department of Labor has filed a lawsuit against Tulsa-based El Tequila LLC and owner Carlos Aguirre after an investigation by the department’s Wage and Hour Division found that the defendants violated the Fair Labor Standards Act’s minimum wage, overtime and record-keeping provisions. These violations resulted in a total of approximately $1 million in unpaid wages owed to 221 kitchen and wait staff, hosts and bussers at four restaurant locations.

The suit was filed in the Northern District of Oklahoma, Tulsa Division, and it seeks to recover the full amount of back wages for the employees as well as an injunction prohibiting future violations of the FLSA.

“The restaurant industry employs some of our country’s lowest-paid, most vulnerable workers,” said Secretary of Labor Hilda L. Solis. “When violations of the FLSA are discovered, the Labor Department will take appropriate action to ensure workers receive the wages they have earned and to which they are legally entitled.”

Violations were found at the company’s restaurants on Memorial Drive and South Howard Avenue in Tulsa, East 86nd Street North in Owasso and North Elm Place in Broken Arrow.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates for hours worked beyond 40 per week. In accordance with the FLSA, an employer of a tipped employee is required to pay no less than $2.13 an hour in direct wages provided that amount plus the tips received equals at least the federal minimum wage of $7.25 an hour. If an employee’s tips combined with the employer’s direct wages do not equal the minimum wage, the employer must make up the difference. Employers are required to provide employees notice of the FLSA’s tip credit provisions, to maintain accurate time and payroll records, and to comply with the act’s restrictions applying to workers under age 18.

For more: http://www.dol.gov/opa/media/press/whd/WHD20122050.htm#.UIqdN4b0_h8

Comments Off on Hospitality Industry Legal Risks: Oklahoma Restaurant Group Sued By Labor Department For Violating Fair Labor Standards Act; Fixed Salaries Without Overtime And Tips Alleged

Filed under Employment Practices Liability, Labor Issues, Liability, Management And Ownership, Risk Management, Training

Tagged as , , , , , , ,

by | October 22, 2012 · 6:17 am

Hospitality Industry Insurance Risks: Restaurant Operators Face "Financial Hit" From New Health Insurance Benefit Programs That Take Effect In 2014

Under the Patient Protection and Affordable Care Act, companies with 50 or more full-time eligible workers must either provide basic coverage by Jan. 1, 2014, or face fines of $2,000 per employee. A full-time employee is defined as one averaging 30 or more hours per week over a 60-day period.

“We will have a financial hit,” said CEO Victor Ansara. “We first thought it was going to be $300,000, but maybe only $100,000 to $200,000. We just don’t know how many of our employees in their 20s, who are pretty healthy, will want coverage.”

Farmington Hills-based Ansara Restaurant Group, which operates 22 Red Robin outlets and five other restaurants in Michigan and northern Ohio, is bracing financially to expand its health insurance benefit program by as many as 665 full-time workers to accommodate expected federal health care reform.

The first 30 employees are excluded from the penalty. For example, an employer with 75 employees would pay the penalty for 45 workers, or $90,000.

Eligible employees that reject insurance coverage by their employer would have to pay a $95 tax, or 1 percent of income, whichever is greater, in 2014. The tax rises to $325 in 2015 and to a maximum of $695, or 2 percent of income, in 2016. Family coverage taxes would be about three times higher in those years. The penalty is estimated to raise $6.9 billion in 2016, said the Congressional Budget Office.

Ansara said his company covers about 130 management staff with various plans from Blue Cross Blue Shield of Michigan and Blue Care Network. Only about 35 of its estimated 350 eligible hourly workers have opted for the coverage, he said.

“It is very difficult to plan when we don’t know what our health care costs are going to be in 2014,” he said. “To comply with the regulation, we have to offer coverage to all full-time eligible employees.”

Of Ansara’s 2,300 employees, up to 700 hourly workers could become eligible for health insurance coverage, he said.

For more: http://www.crainsdetroit.com/article/20121021/SUB01/310219956/red-robin-group-among-restaurants-bracing-for-health-insurance-reform#

Comments Off on Hospitality Industry Insurance Risks: Restaurant Operators Face "Financial Hit" From New Health Insurance Benefit Programs That Take Effect In 2014

Filed under Health, Insurance, Labor Issues, Liability, Management And Ownership, Risk Management

Tagged as , , , , ,

by | October 19, 2012 · 6:46 am

Hospitality Industry Legal Risks: Florida-Based Restaurant Group Faces Five Separate "Federal Labor Law Class-Action Lawsuits"; Employees Required To Work "Off The Clock" And Skip Required Breaks

“…Lawsuits filed by the Mexican-American Legal and Education Fund accuse Darden Restaurants—which owns the Capital Grille, Red Lobster and Olive Garden chains—of violating state and federal labor laws…the suits claim the restaurants regularly ask employees to work off the clock, skip legally required breaks and report to work when sick…”

The world’s largest full-service restaurant ownership company faces five separate class-action lawsuits filed by a group that works to protect restaurant workers’ rights.

The litigation began as a single class-action lawsuit filed in federal court in Chicago, with state class-action claims covering workers in Illinois, as well as California, Florida, Maryland and New York. Eventually, the lawsuit was severed into five jurisdictions due to the large size of the classes and the complexity of the various state claims. Five regional U.S. District Courts will hear the cases.

The lawsuits were initiated by the Restaurant Opportunities Cen­­ters United, which seeks to improve wages and working conditions for low-wage restaurant workers.

For more:  http://www.businessmanagementdaily.com/33010/worker-advocates-cook-up-five-suits-against-restaurant-group

Comments Off on Hospitality Industry Legal Risks: Florida-Based Restaurant Group Faces Five Separate "Federal Labor Law Class-Action Lawsuits"; Employees Required To Work "Off The Clock" And Skip Required Breaks

Filed under Employment Practices Liability, Insurance, Labor Issues, Liability, Management And Ownership, Training

Tagged as , , , , , , , ,

by | October 18, 2012 · 6:12 am

Hospitality Industry Health Risks: North Carolina Restaurant Settles "Food Contamination" Class-Action Lawsuit For $375,000; Hundreds Had To Be Vaccinated For Hepatitis Virus

“…the lawsuit alleged that the restaurant chain exposed customers to potentially contaminated food or people, cost them wages and medical expenses, and caused fear and physical pain…a $375,000 fund has been set up by the restaurant’s parent company… to settle a class-action lawsuit…”

A lawsuit has been settled involving hundreds of people who had to be vaccinated after eating at a Fayetteville restaurant last year. The Fayetteville Observer reported those who were immunized after eating at the Olive Garden restaurant are eligible for payments of up to $250.

Hundreds of people got vaccinations after learning that one of the restaurant’s workers had tested positive for the virus, which causes liver inflammation.

Florida-based GMRI denied any wrongdoing but said it wanted to settle to end the litigation.

For more:  http://www.northjersey.com/news/health/174592761.html

Comments Off on Hospitality Industry Health Risks: North Carolina Restaurant Settles "Food Contamination" Class-Action Lawsuit For $375,000; Hundreds Had To Be Vaccinated For Hepatitis Virus

Filed under Food Illnesses, Guest Issues, Health, Insurance, Labor Issues, Liability, Management And Ownership

Tagged as , , , , , , ,

by | October 14, 2012 · 7:07 am

Hospitality Industry Health Risks: Washington Restaurant Closed Down By Health Department After Confirmation Of Salmonella Poisoning

“…(the Health Department) closed the restaurant this morning as a further precaution to reduce the risk of Salmonella spreading to others. Our staff is interviewing employees and patrons to learn more about the possible source of this outbreak, such as a contaminated food source.”

The Clark County Public Health Department is closing the On the Border Mexican restaurant in Vancouver, Washington after an outbreak of Salmonellaamong patrons. The restaurant is located at 1505 SE 164th Avenue. So far, there are 11 confirmed cases and 5 probable cases associated with this outbreak. Public health officials are asking that anyone who ate at the restaurant between September 20 and October 8, 2012 and experiencing symptoms of salmonellosis contact a health care provider.

The symptoms of Salmonella food poisoning include diarrhea, which may be bloody, fever, chills, abdominal cramps, and vomiting. People usually become ill one to three days after infection. Attorney Elliot Olsen said, “facilities that sell food are supposed to ensure that their product is safe. Food contaminated with pathogenic bacteria is not fit to eat.”

Since Salmonella infections can spread person-to-person, government officials are stressing the need for thorough hand-washing after using the bathroom, and before and during food preparation. Anyone who is ill should stay home and not prepare food until their symptoms have disappeared.

For more:  http://foodpoisoningbulletin.com/2012/vancouver-wa-mexican-restaurant-on-the-border-closed-after-salmonella-outbreak/

Comments Off on Hospitality Industry Health Risks: Washington Restaurant Closed Down By Health Department After Confirmation Of Salmonella Poisoning

Filed under Food Illnesses, Guest Issues, Health, Insurance, Labor Issues, Liability, Management And Ownership, Risk Management

Tagged as , , , , , ,

by | October 13, 2012 · 6:17 am

Hospitality Industry Fire Safety Risks: South Carolina Hotels Implement "Preventative Maintenance" Program Including Housekeeping Checking Smoke Detectors After Guests Depart

“…the resort says it follows a detailed preventative maintenance program with a 300 item checklist, ensuring that everything from electric outlets to appliances inside guest rooms are safe to use…upon the departure of each guest, housekeeping is instructed to check the smoke detector for safety to make sure it’s still in working condition…”

Studies show that working smoke detectors cut your chance of dying in a fire by half.

When it comes to hotel fire safety, Springmaid Beach Resort on Ocean Blvd learned just how important smoke detectors are, after a small electrical fire broke out in the boiler room this past summer.

“We had to clear all those rooms out of people that were right around it and move them to a different property,” says Donald Hovis, the marketing manager for the establishment.

It’s a safety measure more hotels are starting to do. In Georgetown, the fire department has teamed up with hotels requiring cleaning staff to check smoke detectors after each guest checks out of the room. The staff also leaves a card stating the test has been done for the next occupant to see.

While Myrtle Beach doesn’t require it, the fire department says it’s been working with hotels for years on getting housekeeping to check the devices, and the fire marshal says he’s confident Grand Strand hotels are ensuring guests’ safety.

Several hotels we checked with along Ocean Boulevard say they check them regularly. Hovis says following this summer’s small fire, they learned another valuable lesson.

For more:  http://www.wmbfnews.com/story/19806893/grand-strand-hotels-reveal-fire-safety-plan

2 Comments

Filed under Fire, Guest Issues, Insurance, Labor Issues, Liability, Maintenance, Management And Ownership, Risk Management, Training

Tagged as , , , ,

by | October 12, 2012 · 6:13 am

Hospitality Industry Legal Risks: Texas Restaurant Settles "Disability Discrimination" Lawsuit For $41,500 And Agrees To Train Managers On Use Of "Hearing-Impaired Communication Systems"

“…the EEOC alleged that the company violated the Americans with Disabilities Act of 1990 by denying job applicant Michael Harrison employment at its Wendy’s franchise in Killeen, Texas, after learning of his hearing impairment…In addition to paying $41,500 to Mr. Harrison, Wendy’s agreed to provide all managers and supervisory employees training on the ADA and specific training on the use of hearing-impaired communication systems…”

A franchisee of The Wendy’s Co. fast-food restaurant chain has agreed to settle a disability discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission, paying $41,500 to resolve the case and implement employee training.

After successfully interviewing with the Wendy’s shift manager for a cooker position, Mr. Harrison was interviewed by the general manager through a telephonic system for the hearing-impaired. During the course of the interview, the EEOC alleged that the general manager told Mr. Harrison that “there is really no place for someone we cannot communicate with,” the EEOC said in the statement.

After failing to reach a prelitigation settlement, the EEOC filed the lawsuit in the U.S. District Court for the Western District of Texas in Waco.

For more:  http://www.businessinsurance.com/article/20121011/NEWS07/121019971?tags=|70|75|305|303

Comments Off on Hospitality Industry Legal Risks: Texas Restaurant Settles "Disability Discrimination" Lawsuit For $41,500 And Agrees To Train Managers On Use Of "Hearing-Impaired Communication Systems"

Filed under Insurance, Labor Issues, Liability, Management And Ownership, Risk Management

Tagged as , , , , , ,

by | October 11, 2012 · 6:11 am

Hospitality Industry Legal Risks: Nevada Hotel Settles Employment Discrimination Lawsuit With Justice Department For $49,000; Must Implement New Employment Eligibility Verification Policies

“Employers may not treat authorized workers differently during the employment eligibility verification and reverification process based on their citizenship status or national origin,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.

Under the settlement agreement, Tuscany will pay $49,000 in civil penalties to the United States and full back pay to a victim.  In addition to corrective action already taken, Tuscany also agrees to implement new employment eligibility verification policies and procedures that treat all employees equally regardless of citizenship status, conduct training of its human resources staff on their responsibilities to avoid discrimination in the employment eligibility verification process, and be subject to reporting and monitoring requirements.

The Justice Department today reached an agreement with Tuscany Hotel and Casino LLC in Las Vegas resolving a lawsuit alleging that the company discriminated in the employment eligibility verification and re-verification process.

The Immigration and Nationality Act (INA) requires employers to treat all authorized workers equally during the hiring, firing and employment eligibility verification process, regardless of their national origin or citizenship status.

The department’s case, filed on May 11, 2012, alleged that Tuscany treated non-citizens differently from U.S. citizens during the employment eligibility verification and reverification process.   The complaint alleged the casino required non-citizen employees to provide more or different documents or information than it required from citizen employees during the initial employment eligibility verification process.  According to the complaint, the company then used the documents or information it gathered to impose improper document requests on non-citizens during the reverification process as a condition of continued employment.
The complaint further alleged that the casino subjected non-citizen employees’ documents to a heightened review process by senior human resources representatives that was not applied to documents presented by U.S. citizens.

For more:  http://www.opposingviews.com/i/society/drug-law/justice-department-settles-lawsuit-against-las-vegas-casino-unfair-documentary

Comments Off on Hospitality Industry Legal Risks: Nevada Hotel Settles Employment Discrimination Lawsuit With Justice Department For $49,000; Must Implement New Employment Eligibility Verification Policies

Filed under Labor Issues, Liability, Management And Ownership, Risk Management

Tagged as , , , ,

by | October 5, 2012 · 6:20 am

Hospitality Industry Legal Risks: Workers File Class-Action Lawsuit Against Los Angeles Hotel For "Millions Of Dollars In Unpaid Wages"

“…(the suit) alleges that management has routinely required them to work through required lunch breaks and rest periods and after clocking out…Housekeepers also claim hotel management refused to reimburse them after requiring them to buy cleaning supplies such as sponges and gloves to clean guest bathrooms…”

The suit also alleges that a majority of Holiday Inn LAX employees are earning less than $11.97 per hour, the minimum living wage for hotel workers in the LAX corridor.

Workers at the Holiday Inn Los Angeles International Airport filed a class action lawsuit on Thursday demanding millions of dollars in alleged unpaid wages. A non-union group of bartenders, housekeepers, cooks and other workers filed the suit with support from L.A. hospitality labor union Unite Here Local 11.

Adrian Valencia, general manager at Holiday Inn LAX, said the hotel was surprised by the lawsuit.

“We had never been contacted by the union until Monday, when they stormed in yelling and screaming into the administration offices,” he said. “We pay the annual living wage increase as of July 1 each year and we have some of the best scores for a Holiday in as far as cleaning. We use proper procedures here at the hotel.”

Randy Renick, the attorney representing the workers, said the goal of the suit is to address long-standing labor grievances.

For more: http://www.labusinessjournal.com/news/2012/oct/04/lax-hotel-employees-file-suit-unpaid-wages/

Comments Off on Hospitality Industry Legal Risks: Workers File Class-Action Lawsuit Against Los Angeles Hotel For "Millions Of Dollars In Unpaid Wages"

Filed under Labor Issues, Liability, Management And Ownership

Tagged as , , , , ,

by | September 30, 2012 · 7:06 am

Hospitality Industry Legal Risks: Texas Restaurant Chain Sued By EEOC For Firing "Pregnant Employees Under A Discriminatory Written Policy"

“…According to the EEOC’s lawsuit, Maryann Castillo and other female workers were laid off after the third month of their pregnancies under a written policy, set out in Bayou City Wings’ employee handbook…”

JC Wings Enterprises, LLC, doing business as Bayou City Wings, a Baytown-based restaurant chain, violated federal law when its managers laid off pregnant employees under a discriminatory policy, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit it filed today.

  Bayou City Wings owns and operates restaurants in Baytown, Houston and surrounding areas.  The company’s district manager laid off Castillo pursuant to the policy even though she had provided a doctor’s note that indicated she could work up to the 36th week of her pregnancy and that her doctor had not placed any restrictions on her ability to work.

During the EEOC’s investigation of a discrimination charge brought by Castillo, Bayou City Wings named eight female employees who were laid off from work because of their pregnancies.  According to a Bayou City Wings general store manager, for a manager to keep a pregnant employee at work any longer would “be irresponsible in respect to her child’s safety” and would jeopardize his position with the company “for not following procedures.”

Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act, prohibits employers from discriminating against employees on the basis of sex or pregnancy.  The EEOC filed suit (Civil Action No. 4:12-cv-02885) in U.S. District Court for the Southern District of Texas, Houston Division, after first attempting to reach a pre-litigation settlement through its conciliation process.   The EEOC seeks an injunction, back pay with pre-judgment interest, reinstatement or front pay, compensatory damages and punitive damages, in amounts to be determined at trial.

For more:  http://www.eeoc.gov/eeoc/newsroom/release/9-12-26d.cfm

Comments Off on Hospitality Industry Legal Risks: Texas Restaurant Chain Sued By EEOC For Firing "Pregnant Employees Under A Discriminatory Written Policy"

Filed under Insurance, Labor Issues, Liability, Management And Ownership, Risk Management, Training

Tagged as , , , , ,