Wage and Hour Division (WHD)
U.S. Department of Labor
5 South Dakota businesses ordered to pay 293 workers more than $124,000 in back wages following US Labor Department investigations
More than $79,000 in penalties also assessed for FLSA and H-2B violations
RAPID CITY, S.D. -- The U.S. Department of Labor has ordered five companies in South Dakota to pay $124,604 in back wages to 293 workers employed at resorts in the Black Hills after investigations by the department’s Wage and Hour Division disclosed violations of the H-2B temporary nonimmigrant visa program and the Fair Labor Standards Act’s minimum wage, overtime and record-keeping provisions. The division also has assessed the employers more than $79,500 in civil money penalties for willful and/or repeat violations. A willful violation is one committed with intentional knowledge or voluntary disregard for the law’s requirements.
The companies include Mount Rushmore KOA, Xanterra Parks and Resorts, and three hotels: the Hampton Inn, America’s Best Value Inn and the Adoba Eco Hotel, which is owned by Shiba Investments.
“The hospitality industry employs many low-wage and vulnerable workers who are susceptible to labor violations and disparate treatment,” said Cynthia Watson, regional administrator of the Wage and Hour Division in the Southwest. “The Labor Department is committed to protecting the rights of all workers employed in this country. As demonstrated by the resolution of this case, we are using all tools available, including penalty assessments, to remedy violations, promote accountability, and ensure a level playing field for law-abiding employers and legitimate users of the foreign guest worker programs.”
Investigators from the division’s Denver District Office found that the companies engaged a common agent, Global Employment Agency, to recruit and hire foreign H-2B guest workers who were primarily from Indonesia and the Philippines. GEA required impermissible payments from prospective workers seeking employment at all five establishments. Another H-2B violation found was the employers’ failure to pay the offered wage promised for all hours worked during the entire certified period of employment.
FLSA violations include failing to reimburse some H-2B employees for inbound travel expenses, which caused their hourly wage rates for the first week of work to fall below the federal minimum wage, and not paying proper overtime compensation for hours worked in excess of 40 per week.
Greenwood Village, Colo.-headquartered Xanterra Parks and Resorts operates concessions and dining facilities at Mount Rushmore National Park. The department has ordered Xanterra to pay back $20,987 to 20 employees and $11,720 in civil money penalties.
The Mount Rushmore KOA campground in Hill City, S.D., has been ordered to pay $23,028 to 52 employees and $20,945 in civil money penalties.
The three hotels are all located in Rapid City, S.D. Shiba Investments has been ordered to pay $56,289 to 92 employees of the establishment that previously operated as the Radisson Hotel and is now the Adoba Eco Hotel, as well as $38,225 in civil money penalties. The Hampton Inn has been ordered to pay $21,771 to 123 employees and $5,014 in civil money penalties. America’s Best Value Inn has been ordered to pay $2,527.24 to six employees and $3,620 in penalties.
In January, the Labor Department ordered Custer State Park Resort in the Black Hills to pay $93,000 in back wages to 72 foreign workers hired for the 2010 tourism season through GEA. Investigators from the Wage and Hour Division’s Denver District Office found that GEA had required impermissible payments from prospective employees ranging from $530 to $1,500. Additionally, H-2B employees serving as dining room attendants, front desk clerks and housekeepers often had worked in excess of 40 hours per week but were not paid the required overtime wage rate for such hours.
The H-2B program permits employers to temporarily hire nonimmigrant foreign workers to perform nonagricultural labor or services in the United States, but only when qualified U.S. workers are unavailable and the employment of the H-2B workers will not adversely affect the wages and working conditions of similarly employed U.S. workers. The employment must be of a temporary nature for a limited period of time, such as a one-time occurrence or for seasonal, peak load and intermittent needs. The program requires an employer to attest to the Department of Labor that it will offer a wage that equals or exceeds the highest of the following: the prevailing wage for the occupation and geographic area, applicable federal minimum wage, state minimum wage or local minimum wage. This wage will be paid to the H-2B workers and certain similarly employed U.S. workers during the entire period of the approved labor certification. The program also establishes recruitment and displacement standards in order to protect similarly employed U.S. workers.
The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 per hour, as well as one and one-half times their regular rates for every hour they work beyond 40 per week. The law also requires employers to maintain accurate records of employees’ wages, hours and other conditions of employment, and prohibits employers from retaliating against employees who exercise their rights under the law.
Accessible and searchable information on enforcement activities by the Department of Labor is available at http://ogesdw.dol.gov/search. Publicly available enforcement data are available through the free mobile application “Eat Shop Sleep,” which enables consumers, employees and other members of the public to check if a hotel, restaurant or retail location has been investigated by the Wage and Hour Division, and whether FLSA violations were found. The app is available at https://sites.google.com/site/eatshopsleepdol.
For more information about the H-2B program, the Fair Labor Standards Act and other federal wage laws, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243) or the division’s Denver office at 720-264-3282. Information also is available at http://www.dol.gov/whd.
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