Tag Archives: Labor Issues

by | November 20, 2012 · 7:22 am

Hospitality Industry Legal Risks: Colorado-Based Restaurant Group Will Defend Itself Against Class-Action Lawsuit Alleging Overtime Violations; Company Maintains That Managerial Salaried Employees Are "Apprentices"

“…The class-action complaint…says Chipotle misclassified its “apprentices” as managerial salaried employees who don’t qualify for overtime pay. The suit contends apprentices earn salaries of $40,000 but frequently work more than 40 hours a week and often perform the duties of hourly workers, including cooking and filling orders…”

Chipotle Mexican Grill Inc. says a lawsuit alleging the Colorado- based company has failed to pay overtime to hundreds of employees is frivolous.

Chipotle spokesman Chris Arnold said the restaurant chain carefully defines the roles in its restaurants and that the apprentice position is “clearly” a managerial role ineligible for overtime, under state and federal laws.

The lawsuit seeks back pay and damages. Chipotle has about 1,350 restaurants.

For more:  http://www.insurancejournal.com/news/west/2012/11/19/271081.htm

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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

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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

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by | May 29, 2012 · 7:13 am

Hospitality Industry Legal Risks: Hotel Management Must Review Social Media Policy For Employees To Ensure Restrictions Do Not Violate "NLRB Section 7 Rights"

“…in late February 2012, the NLRB filed a complaint against a group of Hyatt Hotels alleging, among other things, that the restrictions placed on the use of social media, such as admonitions not to comment on hotel properties or locations, or to use the Hyatt brand/logo or photos of the properties, were overboard and discriminatory…”

The NLRB reports expressed concerns regarding attempts by an employer to block — for example — employees from using a company’s trademarked logo in social media. That was considered, generally, to be in violation of an employee’s Section 7 rights.

“Interests protected by trademark laws — such as the trademark holder’s interests in protecting the good reputation associated with the mark from the possibility of being tarnished by inferior merchandise sold by another entity using the trademark and in being able to enter a related commercial field and use its well-established trademark, and the public’s interest in not being misled as to the source of products using confusingly similar marks — are not remotely implicated by employees’ non-commercial use of a name, logo, or other trademark to identify the Employer in the course of engaging in Section 7 activity” (2012 Report).

Yet, such disclaimers are sometimes required by the Federal Trade Commission. In fact, under the revised regulations published by the FTC in 2009, if anyone other than a company or the brand owner itself advertises or talks about the company’s product or service, the FTC requires the disclosure of the relationship between the “talkee” and the “brand,” so that potential consumers understand that the recommendation or information contained in the social-media posting could be biased (See generally 16 C.F.R. §255.)

For more:  http://www.hreonline.com/HRE/story.jsp?storyId=533347702

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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 | January 30, 2012 · 9:07 am

Hospitality Industry Legal Risks: Hotel Owners And Management Will Face Numerous Compliance And Regulatory Issues In 2012

“The biggest issue hotel managers face in the coming year vis-à-vis the law is compliance with the myriad applicable statutes, rules and duties owed…”

A hotel faces potential legal consequences for all of the following:

  • negligence in the maintenance of its premises
  • failure to comply with the Fair Labor Standards Act (minimum pay, overtime pay, equal pay, child labor)
  • discrimination against employees based on minority status
  • denial of services to guests perceived as illegal discrimination
  • contending with internet reviews, disagreements with a franchisor
  • overstepping bounds with unions
  • misapplying tip pools
  • eradicating bed bugs and other pests
  • dram shop violations
  • food issues
  • security concerns
  • insufficient insurance
  • trademark and copyright violations
  • securing and maintaining necessary business licenses
  • tax obligations
  • sanitation issues in spas
  • contract disagreements with suppliers
  • guests’ rights to privacy
  • SEC mandates
  • Managing employees to ensure compliance with all of the above, and much more.

For more:  http://www.hospitalitynet.org/news/154000320/4054640.html

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by | December 19, 2011 · 6:14 am

Hospitality Industry Employee Risks: Tennessee Hotels Fined By Department Of Labor For "Fair Labor Standards Act" Minimum Wage Violations

“…Violations included charging excessive room and board to employees who also lived at a property or paying housekeepers by the room cleaned, resulting in a person’s pay falling below the $7.25 minimumwage; paying “straight time” for all hours worked, including overtime; and failing to pay for all hours worked by temporary employees…”

The U.S. Department of Labor said Wednesday that 35 franchised hotels and motels, including 11 in Middle Tennessee, violated minimum wage, overtime and other labor laws during the fiscal year ended Sept. 30. The agency said it fined those businesses a cumulative $14,552 and recovered more than $173,000 in wages owed to 283 employees.

Some hotel and motel operators also misclassified employees as independent contractors, denying them legal protections under federal labor laws, the agency said.

The citations and fines are part of a multiyear enforcement initiative focusing on Tennessee’s hotel and motel industry, in which regulators have “found widespread noncompliance with the minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act,” the agency said in a news release.

For more:  http://www.tennessean.com/article/20111215/BUSINESS01/312150046/U-S-Labor-fines-11-Middle-TN-hotels-wage-violations?odyssey=tab%7Ctopnews%7Ctext%7CFRONTPAGE

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by | August 4, 2011 · 2:19 am

Hospitality Industry Employee Risks: Congressional Committee Investigates "Multiple, Redundant Inspections" By OSHA Related To "Labor Intensive" UNITE HERE Campaign On "Safe Work Environments" Against Hotel Management

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by | January 31, 2011 · 8:05 am

Food Industry Risks: New York Tortilla Factory Ordered To Shut Down After Employees' Death And Discovery That Owners Did Not Carry Workers' Compensation Insurance

The state Workers Compensation Board issued a stop-work order at the Williamsburg facility after learning the factory’s owner, Erasmo Ponce, was not offering workers’ compensation insurance to his employees.

A Brooklyn tortilla factory where a man was crushed when he fell into a dough mixer has been temporarily shuttered, state officials said Friday. Tortilleria Chinantla was not closed because of Juan Baten’s gruesome death, but his loss of life did lead investigators to the facility, officials said.

“The owner would need to get the insurance and pay fines before he is permitted to reopen,” said agency spokesman Brian Keegan.

The Occupational Safety and Health Administration and the state Department of Labor are investigating the deadly accident. Baten, 22, reached into the mixer early Monday and was sucked inside after his hand was snagged by one of its blades. The young father was killed instantly when a turbine broke his neck.

For more:  http://www.nydailynews.com/ny_local/brooklyn/2011/01/29/2011-01-29_feds_shutter_deadly_bklyn_tortilla_factory.html

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by | August 19, 2010 · 10:16 am

Hospitality Industry Employment Risks: Hospitality Management Must Have “Valid” Reasons To Fire Employees

  • Make sure that you have a valid reason for firing (or laying off) the employee. Some invalid reasons include: retaliation, complaining about OSHA violations, discrimination, alien status, and any violation of public policy.
  • Keep it confidential: a company-wide Eblast is probably not the best approach to alerting others in the company of the employees’ situation. Rather, only telling those individuals that need to know is the best approach to ensuring that the employee does not hear about his firing before it happens.
  • Plan ahead: sounds simple enough, but by considering all the legal requirements you need to comport with before firing the employee, you will also alleviate a lot of legal concerns that may occur post-firing. This may include: severance offers, monies due, terms in the employment contract, company policies, etc.
  • Keep a paper trail: keeping copies of performance reviews, relevant correspondence, and other personnel documents will help protect you should there be a lawsuit later on.
  • The employee should not be completely surprised by the firing or lay-off. Whether it is keeping employees abreast of the struggling finances of the company, or alerting the worker to poor job performance, there should be a dialogue before the employment termination.

Although a majority of the American workforce is based on “at will” employment, essentially meaning that the employer-employee relationship can be severed at any time, there are still some viable concerns over a wrongful termination suit in any situation. Making sure you have a valid reason for firing an employee, and planning the conversation ahead of time will help with the actual firing and protect your company from many of the legal issues that follow.

In the end, honesty is almost always the best policy, and usually appreciated as the employee can take your reasons with them as they job hunt.

For more:  http://www.reuters.com/article/idUS348304971720100817

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