Wage and Hour Division (WHD)
Archived News Release — Caution: Information may be out of date.
Date: March 31, 2015
Contact: Scott Allen Rhonda Burke
U.S. Department of Labor
Wage and Hour Division
Release Number: 15-391-CHI
Operator of 70 hotels in Michigan, Ohio, Indiana agrees to change business practices after US Labor Department finds significant wage violations
Nearly 100 employees will receive back wages and damages
DETROIT -- Workers in the hotel industry are hard-working people who make our beds, clean our rooms, maintain the property and greet us with a smile. Many of them earn low wages and often struggle to meet their basic needs. This challenge is made even more difficult when employers fail to pay them for all the hours they worked.
U.S. Department of Labor Wage and Hour Division investigators looked no further than Grand Rapids and Monroe, where significant minimum wage and overtime violations were discovered at seven Michigan hotels operated and owned by A & M Hospitality and Management Inc., Grand Hospitality Management Inc. and owners Akram Namou and Hikmat Piromari. An investigation found 96 housekeepers and maintenance employees were not paid fully for work performed before and after their shifts ended at Sleep Inn & Suites, Best Western Hospitality Hotel and Suites, Holiday Inn Express, Hawthorn Suites and Clarion Inn & Suites, of Grand Rapids; and the Red Roof Inn and America’s Best Value Inn & Suites, of Monroe.
A & M Hospitality, Grand Hospitality, Namou and Piromari resolved the violations by signing a consent judgment entered in Detroit’s U.S. District Court for the Eastern District of Michigan. The judgment requires payment of $50,000 in back wages and damages to the employees working at the seven hotels. The court action also enjoins the employer from violating the Fair Labor Standards Act in the future and requires significant changes in its business practices to ensure compliance with the FLSA at all its locations. The employer, comprised of two hospitality groups, operates 70 hotels in Michigan, Ohio and Indiana.
“This investigation is a win for workers and law-abiding employers. We are pleased that these two companies have committed to change their corporate culture from top-to-bottom to ensure they are paying workers legally. This will benefit the workers at the seven hotels we investigated, as well as all 70 of the hotels managed by these companies,” said Karen Chaikin, regional administrator for the Wage and Hour Division in Chicago. “These entry-level workers, often with limited English proficiency, are particularly vulnerable to unfair labor practices. The Wage and Hour Division will use every tool we have to ensure workers receive the wages they earned and to level the playing field for employers.”
The consent judgment also requires the hospitality companies to hire a director of FLSA compliance through a certified public accountant to train and direct regional and general managers, and conduct self-audits of payroll records for compliance. The companies will also revise employee handbooks and establish a toll-free number for workers to seek guidance and report any pay discrepancies.
The investigations uncovered violations of the FLSA, including failure to pay for work performed before and after scheduled shifts and other compensable work time; failure to pay hourly employees legally required overtime at time and one-half for work beyond 40 hours in a workweek; not combining hours for employees who worked at two locations in the same workweek to determine if they were owed overtime; and failure to maintain accurate records of all hours worked.
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 hourly rates for hours worked beyond 40 per week. The FLSA provides that employers who violate the law are, as a general rule, liable to employees for their back wages and an equal amount in liquidated damages. Liquidated damages are paid directly to the affected employees. Additionally, the law requires employers to maintain accurate time and payroll records and prohibits retaliation against employees who exercise their rights under the law.
For more information about the FLSA, visit https://www.dol.gov/whd or call the division’s toll-free helpline at 866-4US-WAGE (487-9243).
Civil Action Number: 2:15-cv-10736
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