Karen Boshell  

Lodging Industry Targeted by Department of Labor

The American Hotel & Lodging Association learned in June that the U.S. Department of Labor's Wage and Hour division is in the final planning stages of an enforcement initiative that targets the lodging industry in general and hoteliers that employ H-2B workers in particular.  It is highly likely that every other hotel in the country could be subject to an audit as well.

The Wage and Hour Division is targeting industries where it fells wage and hour violations "are most likely to occur" and to ensure that those workers they feel are "most vulnerable" are not being exploited.  The Wage and Hour Division has stated that it will "pursue corporate-wide compliance strategies to ensure that employers take responsibility for their compliance behavior" and that it will "use penalties, sanctions, the Fair Labor Standards Act hot goods provision, and similar strategies - as appropriate - to ensure future compliance among violators and to deter violations among other employers."

The lodging industry will be subject to these actions on two fronts:

1.       The Wage and Hour Division has labeled hotels as a so-called "high-risk industry" that employs the most vulnerable workers.  Our industry will be one among a few others that will be targeted.  The Wage and Hour Division will begin to aggressively audit lodging properties for wage violations and violations of other things under their jurisdiction and;

2.      The "Hotel and Motel Resort Pilot Initiative" will specifically target lodging properties the employ H-2B workers.  This appears to be driven by the philosophy that foreign workers are unnecessary and part of a larger strategy to choke the H-2B program off completely through regulations and administrative actions.  The Wage and Hour Division will most likely focus on seeking violations of labor certifications as well as violations of other rules (see #1 above).

You should consult with your labor attorneys in order to prepare for a wage and hour audit. You should perform a self-audit now to ensure you are in compliance before you are notified of a wage and hour audit.

Hoteliers should also contact their members of Congress and letting them know that these actions by the Department of Labor are not justified and that they need to contact the department on your behalf to insist that they be stopped.