Wage and Hour Division (WHD)
U.S. Department of Labor
US Labor Department investigation finds more than $55,000 in minimum wage and overtime back wages due to 52 employees of Grand Hyatt Denver, Xclusive Staffing
Civil money penalties assessed total $11,440
DENVER -- 1750 Welton Street Investors LLC, doing business as Grand Hyatt Denver, and Xclusive Staffing of Denver, have paid a combined total of $55,691 in minimum wage and overtime back wages to 52 employees following an investigation by the U.S. Department of Labor’s Wage and Hour Division. The agency found violations of the minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act.
Xclusive Staffing provided temporary employees to work as room attendants at the Grand Hyatt Denver. In addition to the back wages found due, the department also assessed civil money penalties totaling $7,920 for the Grand Hyatt and $3,520 for Xclusive Staffing.
“We see a disturbing violation rate among hotel and motel employers, and we are doing something about it,” said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. “Low-wage, vulnerable employees are often hesitant to speak up when subjected to violations. The department is committed to ensuring that an honest day’s work results in an honest day’s pay, and that an employer who plays by the rules isn’t at a disadvantage over one who chooses to skirt the law.”
Investigators found that the employers failed to pay employees for time spent working prior to and after their scheduled shifts. Housekeeping staff was found to arrive early to prepare their carts and to stay late to finish cleaning a required number of rooms, without the extra time recorded or paid. These unpaid work hours resulted in both minimum wage and overtime violations. The employers also failed to pay employees for working through meal breaks and automatically deducted break time, regardless of whether breaks were taken. Record-keeping violations were also cited for the employers’ failure to keep accurate records of hours worked by employees.
Both companies have agreed to comply with the FLSA in the future. The back wages and penalties have been paid in full.
1750 Welton Street Investors LLC is a subsidiary of UBS Realty Investors LLC. Their Grand Hyatt Denver property is managed by Hyatt Corp., headquartered in Chicago, which manages, owns, franchises and develops Hyatt-brand hotels and vacation properties worldwide.
Xclusive Staffing Inc. was also recently found in violation of the FLSA during a Wage and Hour Division investigation of the Gaylord Texan Resort and Convention Center in Grapevine, Texas.
The hotel and motel industry is characterized by a wide variety of employment arrangements, such as subcontracting, franchising, third-party management and other practices that obscure the worker-employer relationship.
The division has found that staffing agencies often provide workers for a variety of jobs in the hotel and motel industry, including housekeeping, food service and janitorial services, and sometimes they misclassify these employees as independent contractors. The division is documenting the structure and complexity of these employment relationships to determine which of these structures is most likely to enable violations, and then target enforcement efforts accordingly.
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 division is concerned about the severity of 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. Since 2009, the division has conducted more than 4,000 investigations of hotel and motel employers, resulting in more than $12.4 million in back wages recovered for more than 23,000 workers nationwide.
The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Additionally, employers must maintain accurate time and payroll records.
For more information about the FLSA 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 District Office at 1-720-264-3250. Information is also available at http://www.dol.gov/whd.
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