Tag Archives: Wage and Hour Division

by | December 13, 2013 · 12:06 pm

Hospitality 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 Hospitality Industry Wage Violation Lawsuitsmaintain 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.”

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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by | November 20, 2013 · 7:12 am

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 Hospitality Industry Wage Violation Lawsuitsmanagement, 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

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by | December 24, 2012 · 7:32 am

Hospitality Industry Employment Risks: South Carolina Restaurants Ordered To Pay $391,000 In Back Wages To Workers; Servers Paid Below Mandated $2.13 Per Hour And Received Tips Only

“…the restaurants agreed to maintain future compliance with the FLSA by keeping accurate records of employees’ work hours, wages and other required employment information; paying all employees at least the Hospitality Industry Wage and Hour Litigationfederal minimum wage; and providing overtime compensation and informing employees in advance that the tip credit will be used…”

Three restaurants in South Carolina have been ordered to pay $391,000 in back wages to workers, as the result of a Department of Labor investigation. The restaurants, all individually owned branches of the San Jose Mexican restaurant chain, owe 37 employees wages for overtime and minimum wages. The DOL’s Wage and Hour Division also found violations in record-keeping provisions.

Following widespread noncompliance in the state’s restaurant industry, the Wage and Hour Division began a multiyear enforcement initiative. Since 2009, more than $2.5 million has been paid to workers, following 2,500 investigations.

All three of the restaurants failed to properly compensate employees. Servers were paid below the mandated $2.13 per hour and made to rely on tips for pay. Other employees were paid flat salaries below the minimum wage requirements, with no regard to hours worked.

For more:  http://ohsonline.com/articles/2012/12/21/three-restaurants-must-pay-391000-in-employee-back-wages.aspx?admgarea=news

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by | March 7, 2012 · 1:46 am

Hospitality Industry Employment Risks: Hotel Management Compliance Audits Can Expose Potential Labor Department "Wage And Hour Division" Violations

• Make sure nonexempt employees are paid the required minimum wage. The current federal rate is $7.25 per hour (some jurisdictions require a higher rate).  Review deductions to ensure that they do not cut employees’ pay below the minimum wage.
• Be certain nonexempt employees are paid the required overtime. Ensure that all bonuses, shift differentials, service charges and other payments are properly included in computing overtime and that deductions do not improperly cut into overtime pay. 
• Pay special attention to whether nonexempt employees accurately record all worktime. Nonexempt employees must record pre- and post-shift work; shift-change overlap; opening or closing activities; compensable training time, meeting time, “on-call” work; and time spent doing work at home. Employees must record meal time and other non-compensable break time, and they must be paid when they do not take that time off. 
• Be sure that all “exempt” employees meet the requirements for exemption. Review the criteria defining who may be treated as exempt from the Fair Labor Standard Act’s minimum-wage and/or overtime requirements. “Salaried” employees are not necessarily exempt. Certain positions such as sous chefs and sales managers are vulnerable to challenge. 
• Make certain that exempt employees are paid on a salary basis. The most common FLSA exemptions require that such employees be paid on a “salary basis” and thus receive a fixed, predetermined amount for every workweek in which the employee performs any work, without regard to the number of days or hours worked or the quality of work. Salary deductions are very limited. 
• Strictly comply with child-labor restrictions. There is an age 16 limit for general occupations and an age 18 limit for occupations declared “hazardous” by the U.S. Secretary of Labor. 14 and 15 year olds may be employed in limited occupations, within strict hours and times of day limitations. Identify every employee who is 16 or 17, verify his or her age and exact duties. Identify every employee under 16, verify his or her age, exact duties and hours and times of work.
• Comply with all state and local wage-hour requirements. The FLSA does not preempt tougher state or local provisions. These other laws might include a higher minimum wage; daily overtime; minimum pay for reporting to work; more rigorous child-labor limitations; prohibitions on wage deductions; and time limits for paying employees who resign or are fired.

For more:  http://www.hotelnewsnow.com/Articles.aspx/7679/Government-audits-Get-your-house-in-order

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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 | January 9, 2012 · 6:13 am

Hospitality Industry Legal Risks: Ten Indiana Hotels Named In "Overtime Lawsuit" Involving Housekeepers And Food Service Staff

 “…to get all the rooms cleaned, she didn’t take lunch breaks or worked past the end of her shift…she estimates she is owed $5,200 for unpaid work over the past two years…”

 “…intends to ask the court to make the lawsuit a class action open to more than 1,000 local hotel employees who worked for Hospitality Staffing during the past three years…”

An attorney representing 14 Indianapolis hourly hotel workers plans to file a lawsuit today alleging their employers failed to pay them for overtime. Ten Indianapolis hotels, including some of the city’s largest, and the staffing company for which the employees worked, Hospitality Staffing Solutions, are named in the prepared complaint. Jeffrey A. Macey, an Indianapolis attorney for the workers, said he plans to file the 24-page document today in U.S. District Court in Indianapolis.

Most of the 14 workers making the allegations were housekeepers or food service staff.

For more:  http://www.indystar.com/article/20120109/LOCAL18/201090328/10-Indianapolis-hotels-named-lawsuit-alleging-workers-weren-t-paid-overtime?odyssey=tab%7Ctopnews%7Ctext%7CIndyStar.com

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by | September 22, 2011 · 12:16 pm

Hospitality Industry Employee Risks: Government Regulators To Enforce "Wage-And-Hour Laws" Regarding Minimum Wage And Overtime Pay; Multiple Fines To Hotel Owners Found Guilty Of "Wage Theft"

 “…Labor officials will target businesses that improperly label workers as independent contractors or as non-employees to deprive workers of minimum wage and overtime pay. Misclassifying workers also lets companies avoid paying workers compensation, unemployment insurance and federal taxes..”

Labor Secretary Hilda Solis has made increased enforcement of federal wage-and-hour laws a top priority since she took office in 2009. The department has focused on industries where so-called “wage theft” is considered a problem, including the hotel, restaurant, janitorial, health care and day care industries.

Patricia Smith, the Labor Department’s top lawyer, said sharing information between state and federal agencies could subject businesses to multiple fines.

“There’s more of an incentive to be in compliance because the cost of what we consider to be illegal activity has increased,” Smith said in an interview.

In the past, Smith said, a company might pay a single fine to a state agency for not making proper unemployment insurance payments. Under the new agreements, a state can share the information with the Labor Department, which also can seek fines and penalties for federal wage violations.

The violation also would be reported to the IRS, which can go after the company for unpaid taxes, Smith said.

States that have agreed to work with the Labor Department so far include Connecticut, Hawaii, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington. Labor officials from New York and Illinois plan to sign up in the near future.

For more:  http://online.wsj.com/article/AP1a153b15fbd44922854b2aff6f272223.html

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by | March 6, 2011 · 3:24 pm

Hospitality Industry Employee Risks: Recession Causing More Laid-Off Workers To File "Wage-And-Hour" Claims Which Is Covered Under "Employment Practices Liability" Insurance

“…industry experts say they have seen an increase in wage-and-hour claims, which has led some insurers to stop writing such defense coverage, which most typically is provided for as a sublimit under employment practices liability insurance policies…”

Laid-off workers can, for example, allege that they were not paid for all hours worked, misclassified or not properly paid overtime, experts say.

As layoffs drive wage-and-hour claims, middle-market employers may find defense coverage more difficult to find and more costly when they do, particularly in California, insurers and brokers say. The market firming for wage-and-hour defense coverage comes after a rise in claims by laid-off workers who allege violations of the Fair Labor Standards Act and other laws, according to brokers and insurers.

“It’s a reflection of how difficult it is for employees to find another job,” said Christian Hamlin, a professional lines producer in the Los Angeles office of wholesaler Burns & Wilcox Ltd.

The U.S. unemployment rate remains high, but has improved from the decade’s peak unemployment rate of 10.1% in October 2009, according to the U.S. Department of Labor’s Bureau of Labor Statistics. In February, the U.S. unemployment rate was 8.9%, a 0.1% decline from January, according to BLS.

At the same time, Coverage remains available as some insurers continue to provide it, said Michael Mahoney, senior vp at Willis Insurance Services of California Inc. in San Francisco.

For more:  http://www.businessinsurance.com/apps/pbcs.dll/article?AID=/20110306/ISSUE01/303069982

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by | November 1, 2010 · 12:04 pm

Hospitality Industry Employee Safety And Wage Issues: Hotel Management Should Expect 2011 OSHA Regulations To Require A Written “Injury And Illness Protection Progam” And Dept. Of Labor (DOL) Rule Requiring Full Disclosure On “Worker’s Pay Computation”

 

  • The Occupational Safety and Health Administration (OSHA) is developing a regulation mandating that employers have a written health and safety program, referred to as an Injury and Illness Protection Program or “I2P2.”
  • This rule would give an OSHA investigator the authority to find that an injury should have been avoided even if it was not regulated under a specific standard.
  • OSHA will also publish a regulation that will require employers to analyze every employee injury to determine if it is a work-related recordable musculoskeletal injury.
  • This regulation would set the stage for OSHA to revive its controversial ergonomics standard.

 

  • The Wage and Hour Division at DOL has a highly anticipated rule that would greatly expand recordkeeping requirements under the Fair Labor Standards Act (FLSA)
  • It would require employers to disclose how a worker’s pay is computed and complete a written “classification analysis” for each worker who is exempt or outside of the coverage of the FLSA.

For more:   http://www.worldtrademag.com/Articles/Column/BNP_GUID_9-5-2006_A_10000000000000932009

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by | October 12, 2010 · 11:56 am

Hospitality Industry Employee Risk Issues: Fair Labor Standards Act (FLSA) May Require Hotel Management To Pay “Overtime Compensation” To Employees Who Use Smart-Phones “After Hours”

Under the FLSA, nonexempt employees are entitled to overtime compensation for “time spent working” beyond a 40-hour workweek. An employee does not even need to be required by the employer to work overtime but must merely do so for the employer’s benefit.

While an employee’s off-the-clock smart-phone use may amount to only a few minutes here or there—and the FLSA provides an exception for “de minimis” overtime—legal experts say an employer’s liability can mount up in a class action.

Moreover, the electronic records stored on smart phones may give an employee solid evidence on which to base an overtime claim.

     The department “has willfully violated the FLSA [Fair Labor Standards Act] by intentionally failing and refusing to pay Plaintiff and other similarly situated employees all compensation due them under the FLSA” for their after-hours Blackberry use, Sgt. Jeffrey Allen said in a suit filed in May as a proposed class action. A judge has to certify the case as a class action for it to proceed.

The case is one of a handful nationwide in which employees have claimed overtime pay for smart-phone use—and apparently the first involving public employees. But lawyers say such cases are a clear warning to employers to put a smart-phone usage policy in place before they end up in potentially costly litigation. Smart phones “are very dangerous and risky for nonexempt employees to have if you’re worried about overtime,” says Jeremy A. Roth, a partner at San Diego law firm Littler Mendelson. 

The case is one of a handful nationwide in which employees have claimed overtime pay for smart-phone use—and apparently the first involving public employees. But lawyers say such cases are a clear warning to employers to put a smart-phone usage policy in place before they end up in potentially costly litigation. Smart phones “are very dangerous and risky for nonexempt employees to have if you’re worried about overtime,” says Jeremy A. Roth, a partner at San Diego law firm Littler Mendelson.

For more:   http://www.workforce.com/section/legal/feature/legal-static-over-issuing-smart-phones-workers/index.html

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