Category Archives: Labor Issues

by | March 4, 2012 · 7:39 am

Hospitality Industry Employee Risks: Labor Department Orders South Dakota Hotel To "Pay Back 72 Foreign Workers" For "Impermissible Recruitment Fees"

“…since 2009 Labor Department rules have required businesses to agree it “has contractually forbidden any foreign labor contractor or recruiter whom the employer engages in international recruitment of H-2B workers to seek or receive payments from prospective employees.”

“…Global Employment Agency required impermissible payments from prospective employees from $530 to $1,500…”

The Labor Department announced it had ordered Custer State Park Resorts to pay back $93,000 to its 72 foreign workers hired for the 2010 tourism season. The payments covered impermissible recruitment fees and unpaid overtime. The department fined Custer State Park Resorts an additional $65,000 in civil penalties, which it is appealing. Each year, Custer State Park Resorts hires about 375 to 400 employees, with fewer each year being guest workers, Schmaltz said.

Schmaltz said the unpaid overtime resulted from confusion in the guest worker rules. The bulk of the Labor Department fine Schmaltz said – roughly $60,000 – is repayment for fees taken by Kaubisch.

“We relied too heavily on this vendor who was supposed to know the laws and regulations,” Schmaltz said. “We put too much faith into what Scott knew.”

Kaubisch said he charged the fees to workers “to take care of them.” He took phone calls at all hours, arranged rides and helped secure housing for guest workers. It wasn’t until the investigation last spring, Kaubisch said, that Labor Department officials told him collecting fees was illegal.

Read more: http://rapidcityjournal.com/news/employers-ordered-to-pay-back-foreign-staff/article_1eea0e92-65a9-11e1-886a-001871e3ce6c.html#ixzz1oA6hDlvr

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by | March 3, 2012 · 6:56 am

Hospitality Industry Social Media Risks: Hotel Management Faces Legal Issues With Regard To "Relationships" Of Employees Discovered On Facebook

While platforms such as Facebook and Twitter present new opportunities for training and engaging with employees, they also bring new challenges and wrinkles to the age-old workplace policies and practices…(such as)… two of your most exemplary employees who work the front desk..(who)… one day via a Facebook update… entered into a relationship despite your hotel’s strict policy against it…”

“…A user who posts something on Facebook without the proper security filters does so with no expectation of privacy…”

The above scenario was one of many social-media quandaries presented during a table-top summit Tuesday at the 6th Annual HR in Hospitality Conference & Expo.

In this situation, you could fire Johnny, according to Gregg Gilman, an attorney with New York-based Davis & Gilbert LLP. A user who posts something on Facebook without the proper security filters does so with no expectation of privacy, he said. Thus, you treat the case as if you discovered the illicit relationship in one of the “old-fashioned” ways, such as hearing about it from another employee or observing certain tip-offs. 

“You have this new medium, but the same old rules apply,” Gilman said. “… If you operate by those rules, you’re going to be OK.”

Robert Mellwig, VP of HR for Englewood, Colorado-based Destination Hotels, agreed. “We don’t want to get distracted around the technologies,” he said. “… It could easily happen in any other form.”

Where an employer might get into trouble is if they “friend” an employee on Facebook under false pretences for the sole purpose of uncovering activity that runs counter to workplace policy, Gilman said.

For more:  http://www.hotelnewsnow.com/Articles.aspx/7665/Social-media-brings-new-legal-issues-to-hotels

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Filed under Labor Issues, Liability, Management And Ownership, Privacy, Risk Management, Technology, Training

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by | March 2, 2012 · 8:03 am

Hospitality Industry Legal Risks: Florida Hotel Sued By U.S. Dept Of Labor For "Dodging Taxes By Paying Employees Entirely In Cash" And Denying Overtime

“…The U.S. Department of Labor says the Cavalier Hotel and Crab Shack on Ocean Drive owes its employees $160,000 and that owner Ralph Abravaya skirted taxes by paying his employees in tips and refusing them overtime pay…”

“…Department of Labor’s Wage and Hour Division, says a two-year investigation revealed Abravaya had dodged taxes by paying employees entirely in cash. He also underpaid them by denying them overtime when they worked more than 40 hours per week..”

An art deco hotel on South Beach is locked in a battle with the federal government over the kind of accusations that have gotten the 99 percent so riled up recently.

 “Yeah we screwed up,” Abravaya admits to Riptide. “Alright, so slap me in the hand. But don’t tell me you are going to destroy the business or fine me $300,000. If Abravaya loses in court, he will have to pay a total of $320,000 in fines and unpaid wages, plus court costs.

The hotelier admits that a manager did falsify records in an attempt to escape investigation. But Abravaya says he fired the employee as soon as he learned of the deception. He insists that when he took over the hotel and restaurant in 2009, he simply continued the policy set by the previous owner and paid the employees $6 an hour plus their tips — more than they were owed by law.

For more:  http://blogs.miaminewtimes.com/riptide/2012/03/cavalier_hotel_and_crab_shack.php

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by | March 1, 2012 · 1:24 am

Hospitality Industry Information Risks: Hotel's Store "Enormous Amounts Of Data" That Is Never Used; 100% At Risk And 0% Value

“…companies can go a long way toward reducing their exposure to significant losses resulting from a security breach by putting themselves on a “data diet…There is an enormous amount of information that we never use, but we never get rid of. It’s 100% risk and 0% value. As a risk manager, that’s the scariest equation you’re ever going to hear…”

While there is no way for companies to completely eliminate the risk of data breaches and cyber attacks, there are several steps they can take to reduce their potential financial and reputational losses, a panel of experts said Thursday at the third annual Business Insurance Risk Management Summit®in New York.

“The fact is that you’re going to be attacked. That’s the reality,” said Alan Brill, senior managing director of secure information services for New York-based Kroll Inc. A well-crafted cyber risk management program need not be wildly expensive or complex, Mr Kroll said, but should at least strive for “commercially reasonable levels” based on company size and industry.

For more:  http://www.businessinsurance.com/article/20120229/NEWS06/120229881?tags=|338|299|302|342|303|335

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Filed under Guest Issues, Insurance, Labor Issues, Liability, Maintenance, Management And Ownership, Privacy, Risk Management, Technology, Theft

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by | February 29, 2012 · 8:01 am

Hospitality Industry Employment Risks: Hotel Management And Owners Must Have Firm And Comprehensive Policies For Hiring And Classifying New Employees

Hiring

Background checks are routine now, but one size does not fit all, explained Paul Wagner, shareholder of Ithaca, New York-based Stoke Roberts & Wagner. Know the different rules for each jurisdiction.

  • Beware of process and policy around background checks, where decisions might create discrimination issues related to U.S. Title VIII, or the Fair Housing Act, said David Sherwyn, professor at the Cornell University School, of Hotel Administration.
  • Ensure new hires don’t have restrictive covenants from prior employers, said Gregg Gilman, partner with New York-based law firm Davis & Gilbert LLP. Be sure to tell new hires explicitly, “We don’t’ want your former employers’ trade secrets.” “We’re seeing more and more of this kind of litigation,” Gilman said, adding it’s very expensive and disruptive to defend.

Classifications

 The U.S. Department of Labor’s definition of an independent contractor is not the only factor used in determining who is an employee. The courts use a more expansive test when determining who can file Title VII claims, which prohibits employment discrimination based on race, color, religion, sex and national origin, Sherwyn said. “The issue here is that people sometimes relax a little bit with contractors,” he said. Even if someone is not directly employed by your organization (i.e. a contractor) that person can still bring litigation against you.

  •  In light of increased enforcement by the DOL, companies should have protocols in place before classifying independent contractors, Gilman said. Have a written agreement stating the independent contractor is just that. And avoid the “perma-lancer,” or those permanent freelancers, who are more likely to be classified as regular employees, he said.
  • Self audit often, said Ilene Berman, a partner with Atlanta-based Taylor English Duma LLP. Annually review any exempt employee with “assistant” in the name as well as sous chefs and sales managers. Those are the positions most frequently targeted by plaintiff attorneys.
  • Check local and state laws because exempt in other states does not mean exempt in California, said Nancy Yaffe, partner with Los Angeles-based Fox Rothschild LLP. California is a different beast, she added. You have to analyze employee classifications on a continuous basis.

For more:  http://www.hotelnewsnow.com/Articles.aspx/7647/26-legal-tips-for-hotel-HR-professionals

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by | February 25, 2012 · 9:26 am

Hospitality Industry Employee Risks: Pennsylvania Hotel Manager Charged With Felony Theft For "Activating Company Credit Card" And Making Over $20,000 In Purchases

“….(the former manager) …obtained and activated a credit card without the knowledge of the owners of Mifflinburg Hotel Inc./Scarlet D while he was employed as the manager…(he) then made numerous purchases from Oct. 13, 2010, through Oct. 7…”

A former manager at the Scarlet D/Mifflinburg Hotel is facing several felony theft charges after he allegedly activated a credit card in the business’ name and made purchases totaling $20,363.32.

David Alan Burns, 56, of 121 Georgetown Lane, Milton, was arrested and charged with felony counts of forgery-unauthorized act in writing, access device fraud, theft by deception, theft by failure to make required dispositions of funds received and receiving stolen property. He was arraigned and released on $25,000 unsecured bail.

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Filed under Crime, Labor Issues, Liability, Maintenance, Management And Ownership, Risk Management, Theft

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by | February 24, 2012 · 1:01 am

Hospitality Industry Employment Risks: Tennessee Restaurant Chain Faces "Class Action Lawsuit" Over Classifying Security Guards As "Tipped Employees"

“…employers who rely on the tip credit are advised to determine how much time each tipped employee spends on “non-tipped” activities, and if these “non-tipped” activities constitute more than 20% of the total working time for any shift, the employer must pay the employee the federal minimum wage ($7.25/hour) for all time spent on non-tipped tasks…” 

The issue in Stewart v. CUS Nashville, LLC is whether security guards at Coyote Ugly are “tipped employees” who can lawfully participate in a tip pool. Stewart was a Coyote Ugly bartender, a non-salaried tipped employee. She claims that Coyote Ugly violated the FLSA by requiring employees in her category to contribute their tips to a tip pool so the tips could be shared with, among others, security guards.

 Stewart argues that the security guards are akin to dishwashers or prep cooks and thus do not meet the definition of “tipped employees” who “customarily and regularly receive tips” under 29 U.S.C. § 203(m), (t).

Coyote Ugly argues that, based on their level of customer interaction, including “hollering” to encourage people to enter, checking identification of those who do enter, being stationed in the front of the house with patrons, assisting female patrons onto and off of the bar to dance, picking up glasses and bottles, and otherwise ensuring a safe customer experience, security guards are more akin to bus boys, maître d’s, silverware rollers, sushi chefs, and other front of the house employees who courts have held may properly share in tips.

Although premature to address the merits, the court granted conditional certification to a class of bartenders, barbacks, or waitresses at company-owned Coyote Ugly saloons who were required to share tips with security guards.

 For more:   http://www.jdsupra.com/post/documentViewer.aspx?fid=5a62a28c-b81a-4014-8c9d-025b758ee10f

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by | February 23, 2012 · 8:00 am

Hospitality Industry Employee Risks: Missouri Hotel Accounting Employee Pleads Guilty To "Stealing $170,000 From Petty Cash" Over Seven Years

Mosier was the director of accounting services at Springfield University Plaza Hotel and Convention Center. She admitted defrauding the hotel for more than seven years, beginning in January 2003, by inflating reports of spending from petty cash and diverting the money to her own bank account.

A southwest Missouri woman faces up to 20 years in prison after admitting she stole nearly $170,000 from a Springfield hotel where she worked.

The U.S. Attorney’s office says 47-year-old Janet R. Mosier pleaded guilty Wednesday to allegations in a federal information charging her with wire fraud.

A sentencing date will be scheduled later.

Read more: http://www.stltoday.com/news/state-and-regional/missouri/ex-employee-admits-k-theft-from-mo-hotel/article_70d0ebf8-7847-5c2a-82b4-43288b0a9560.html#ixzz1nDl3Hzry

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by | February 22, 2012 · 1:26 am

Hospitality Industry Health Risks: West Virginia Restaurant Workers Hospitalized After Exposure To Hazardous Chemicals

Nine workers at the IHOP restaurant in the Shops at Trace Fork along Corridor G were taken to the hospital Friday morning after a worker mixed chemicals and released a cloud of hazardous material into the air.

About 50 people were inside the restaurant at about 9:15 a.m. when an employee added the wrong chemical to a dishwasher used to clean restaurant hardware.

South Charleston Fire Department Capt. Virgil White said the two chemicals — a degreaser and a chlorine-based cleaner — are used in routine cleaning at the restaurant and were mixed together in a way that created “hazardous air quality.”

Although the employees are familiar with the cleaning products used, White said, the employee “may have grabbed the wrong bottle to do his mixture with and it created this problem.”

One IHOP employee, who asked not to be identified, said “there was a big cloud of smoke and it filled up the air. It smelled like straight bleach.”

For more:  http://wvgazette.com/News/policeblotter/201202170049

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by | February 21, 2012 · 7:42 am

Hospitality Industry Property Risks: New York Hotel Electrical Panel Overheats Causing Black Smoke And Evacuation Of Guests

“..(the hotel)… will remain closed until an electrical inspection is completed at the hotel…the main electrical panel became too hot, causing black smoke but no fire…”

The Quality Inn, 10 W. Orvis St., and Dar’s Place, which is inside the hotel, were closed after firefighters responded early Monday to a report of smoke originating in the hotel’s electrical room. All power at the hotel was still off as of 5 p.m. Monday, although a generator was providing some lighting.

“It doesn’t look like we’re going to open tonight,” Mr. Stevens said at that time. “There’s still a lot of work to do. What they’re trying to do right now is get the heat turned on in the building.”

When asked if he expected the hotel to open up today, Mr. Stevens replied, “That will depend on what they do tomorrow. There’s a lot of work left to do to get the building up and running.”

Approximately 40 rooms had guests, all of whom were evacuated safely to Emmanuel Congregational United Church of Christ, 39 W. Orvis St. There, guests were served a breakfast courtesy of the church.

For more:  http://www.watertowndailytimes.com/article/20120221/NEWS07/702219855

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