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Secretary of Labor Thomas E. Perez
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News Release

WHD News Release: [12/14/2011] Corrected [02/07/2012]
Contact Name: Michael D’Aquino or Michael Wald
Phone Number: (404) 562-2076 or x2078
Release Number: 11-1687-ATL

CORRECTION: US Labor Department initiative nets $173,000 in back wages for 283 Tennessee hotel and motel workers; employers assessed $14,500 in penalties for violations

Labor law initiative focuses on popular tourist areas such as Nashville, Great Smoky Mountains

NASHVILLE, Tenn. — The U.S. Department of Labor's Wage and Hour Division is conducting a multiyear enforcement initiative focused on the hotel and motel industry in Tennessee, where it has found widespread noncompliance with the minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act. In fiscal year 2011, the division found violations at 34 hotel and motel franchise establishments in Tennessee. The employers were assessed $14,552 in civil money penalties for repeat FLSA and child labor violations, and back wages totaling $173,045 were recovered for 283 employees.

The division also conducted 12 outreach sessions under this initiative, providing FLSA education and compliance assistance to more than 1,300 employers, employees and other stakeholders.

Under the initiative, investigators are visiting hotels and motels in major tourism areas, including Nashville and the Great Smoky Mountains, to assess compliance among establishment owners, third-party management companies and staffing agencies providing workers for the performance of essential hospitality services such as housekeeping, food service, landscaping and janitorial maintenance. Investigators also are engaging the parent companies of local hotels and motels to enlist their cooperation in identifying and ensuring compliance among franchisee-operated establishments. When violations are found, the division will pursue corrective action — including litigation, civil money penalties and liquidated damages — to recover workers' wages and ensure accountability under the law.

Common violations uncovered during the course of these investigations have included employers charging employees in excess of the reasonable cost of board and lodging, causing their wages to fall below the federal minimum wage of $7.25 an hour; paying a flat salary or "straight time" wages for all hours worked, without regard to overtime requirements; paying housekeepers by the room, which often has resulted in a rate of pay below the minimum wage for all of the hours that they worked; failing to pay for all hours worked by temporary help or workers hired through staffing companies who are jointly employed by the hotel; and misclassifying employees as independent contractors, consequently denying them the legal protections guaranteed under the FLSA.

"The Wage and Hour Division's strategic enforcement policies aim to change employer behavior at the industry level, rather than on a case-by-case basis, so the evasive practices that result in underpayment of wages and other labor violations are prevented from occurring in the first place," said Sandra Sanders, district director of the Wage and Hour Division's Nashville District Office. "Through the efforts of our ongoing enforcement initiative, the division is successfully identifying and remedying systemic labor violations in this industry, so Tennessee's workers are protected against exploitation, and law-abiding hotel and motel employers are not placed at a competitive disadvantage for playing by the rules and paying fair wages."

The hotel and motel industry is characterized by a wide variety of employment arrangements such as sub-contracting, franchising and third-party management, and other practices that obscure the worker-employer relationship. The Wage and Hour Division is documenting the structure and complexity of these employment relationships to better target enforcement efforts and ensure accountability throughout all sectors of the industry. From 2005 to 2010, the division's Nashville District Office conducted 160 investigations of hotel and motel employers throughout its jurisdiction, recovering more than $521,300 in back wages for 905 employees who were denied full and fair compensation.

The division continues to provide compliance assistance to employers and industry associations — including chambers of commerce and the Tennessee Hospitality Association — on all applicable wage and hour regulations, child labor restrictions and joint employer responsibilities. The division also is conducting outreach to workers, community organizations, immigrant rights groups, foreign consulates and other stakeholders to inform them of the ongoing initiative and encourage their participation in promoting industrywide compliance.

The FLSA requires that covered 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 employees' wages, hours and other conditions of employment be maintained.

For more information on the FLSA and other federal laws administered by the Wage and Hour Division, call the division's toll-free helpline at 866-4US-WAGE (487-9243) or visit its website at http://www.dol.gov/whd/.

Editor's note: A list of the businesses at which violations were found as well as their locations follows this release. This release was reissued Feb. 7, 2012, to correct the number of establishments and to delete Town and Country Inn, Chattanooga, Tenn., from the list of hotels and motels found to be in violation of the FLSA.


Tennessee hotels and motels found to be in violation of the FLSA:

Name

City

Holiday Inn Express

Newport

Days Inn

Oakland

Colonial Inn

Kingsport

Holiday Inn Express

Johnson City

Holiday Inn Express

Dandridge

Comfort Inn

Lenoir City

Rodeway Inn and Suites

Smyrna

Best Western Airport Inn

Nashville

Quality Inn

Dyersberg

Sleep Inn Nashville Airport

Nashville

Hampton Inn & Suites Downtown

Nashville

Ramada Limited at the Stadium

Nashville

Comfort Inn Nashville West

Nashville

Holiday Inn Express

Nashville

Holiday Inn Express &Suites

Germantown

Sleep Inn & Suites

Gatlinburg

Comfort Suites

Pigeon Forge

Holiday Inn Express & Suites

Pigeon Forge

All Season Suites

Pigeon Forge

Comfort Inn

Sevierville

La Quinta Inn

Kodak

Comfort Suites

Kodak

Comfort Suites

Greeneville

Holiday Inn

Johnson City

Motel 6

Johnson City

Days Inn

Savannah

Comfort Inn Downtown

Nashville

Country Inn & Suites

Nashville

Hampton Inn & Suites Nashville

Nashville

Wingate by Wyndham Nashville

Nashville

Comfort Inn

Pigeon Forge

Guest House International Inn

Pigeon Forge

Mainstay Suites

Pigeon Forge

West Plaza Inn & Suites

Knoxville