DOL Targets Hospitality Industry for Wage and Hour Compliance Audits

DOL to Target Hospitality Industry

Posted on 25-Aug-10 by The Timekeeper

Ignore At Your Peril

If you run a hotel, motel or resort in the U.S., better listen up! I hear the Department of Labor (DOL) is focusing on the hospitality industry for their next round of compliance reviews to begin in October.

Reportedly, the DOL considers hospitality to be another “high risk” industry for violations of the Fair Labor Standards Act (FLSA), like other industries such as food service, car washes and retail. In addition to reviewing businesses for compliance with minimum wage, overtime and employee classification, the DOL will also reportedly be checking immigration compliance, such as documentation and pay for H-2B temporary workers.

A Reprieve? Don’t Count On It.

Apparently, the American Hotel & Lodging Association is urging its members to contact their Congressional representatives in an attempt to thwart the DOL’s plans. Personally, in light of the National Employment Law Project‘s January 2010 report Broken Laws, Unprotected Workers, revealing substantial numbers of workers in low-wage jobs — like many of those in the hospitality industry — are cheated out of pay by employers who fail to pay minimum wage and/or proper overtime… and in light of DOL chief Hilda Solis’s declaration of a renewed DOL focus on compliance after the relative lax enforcement of the Bush years… and the fact that those 250 new Wage & Hour Division examiners need to have something to work on… well, let’s just say if I were a hotel manager, I wouldn’t be holding my breath waiting for the AHLA effort to work.

What To Do… What To Do?

So, assuming you’re a conscientious manager / owner, you could start by reviewing the DOL’s Fact Sheet #45: Hotel and Motel Establishments Under the Fair Labor Standards Act (FLSA). Make sure your business is complying with all the points outlined.

If you or your overtime-eligible employees have gotten slack about the use of your time and attendance system, or — worse — you don’t have a good time and attendance system in place to start with, now’s the time to remedy that situation.

Handwritten timesheets are better than nothing and traditional punch clocks are still a good option in many situations, but for the best accuracy and bonus cost savings I recommend an automated system. You can find badge-based or biometric time tracking systems for very reasonable prices… depending on how big your facility is and how many employees you need to track, you could set up a workable employee time system for as little as around $500.

Since any good automated time and attendance system will export employee time records to popular payroll software and services, with an automated system you’ll end up saving a lot of time and money on payroll preparation. Some time and attendance vendors say you can save enough to pay for the system in just a matter of months. For instance, Acroprint Time Recorder has posted an easy savings calculator you can use to figure up how much money you could save with the more accurate time records and more efficient processing of an automated system.

You should also consider contacting your employment law attorney and having him or her conduct a wage and hour audit, to make sure your operations are in compliance with all applicable local, state and federal wage and hour laws. Among other things, you’ll want to make sure you’re paying people correctly (including overtime), that you’ve got proper documentation for any foreign nationals in your employ and that you’re following applicable child labor laws. (Having your attorney conduct the review may allow attorney-client privilege to protect their findings from “prying eyes” in the event of a subsequent DOL audit.)