Restaurants, Fast Food, and Lodging Establishments
The Hospitality Industry and its FLSA Issues
The DOL Wage and Hour Division (WHD) has been targeting (as a part of its strategic enforcement initiatives) restaurants, fast food businesses, hotels, and motels for more than thirty years. The hospitality industry has found compliance with the FLSA to be a challenge. As explained elsewhere on this site and in linked resources, there are certain "pitfalls" that affect all employers, but the hospitality industry even more than most.
Employers should constantly be alert to the possibility that policies or practices are resulting in violations of the Fair Labor Standards Act. A thorough self-audit is recommended. If you "get your house in order" prior to being investigated by the WHD, your back wage liability may be dealt with voluntarily or you might wish to take your chances that the statute of limitations will erode back wages completely or considerably prior to an investigation or litigation.
Back wage liabilities and illegal employment of minors are very expensive outcomes of WHD investigations. "In my day," (as an enforcement officer with the WHD), we just asked the employer to pay back wages (applying the two-year statute of limitations period). Additionally, civil money penalties were assessed if minimum wage and/or overtime violations were willful or repeated. Penalties were accessed in virtually every child labor violation case. The penalties have not gone away; in fact, they have increased. Nowadays, however, it is often not just a matter of paying back wages; liquidated damages may double the liability. I have also seen cases involving three years. Of course, you do not have to allow the enforcers to bully you into submission. Only a court can force you to pay back wages plus liquidated damages, and go back three years while doing so. The problem is that defending against the assertions can be more costly than just paying what the Wage and Hour Division is demanding.
The solution is to be in absolute compliance with the FLSA.
Ten Reasons to be prepared for an Investigation by the DOL Wage and Hour Division
Services are available nationally (via telephone conferences and email), including FLSA,Service Contract Act, and Davis-Bacon Act consultation, compliance assistance, DOL investigation guidance, self-audit coordination, and litigation support as a consulting expert.