Over the past year, hotels and restaurants increasingly have found themselves on the receiving end of a scheduling letter from the U.S. Department of Labor's Wage and Hour Division (WHD). All around the country, WHD is focusing a significant portion of its investigative resources on the restaurant and hotel industries.
Typical issues addressed in these investigations include the proper payment of tipped employees, the exempt status classification of office and management employees, uniform deductions, payment of the proper rate for overtime hours (particularly for tipped employees), whether the required notice has been given to tipped employees, and whether the employer has the required posters. Issues related to timekeeping and recordkeeping are also addressed in these investigations.
In addition to increasing the frequency of investigations, WHD has adopted more aggressive enforcement tactics, such as starting investigations with little or no notice, requiring the payment of liquidated (double) damages to resolve an investigation, or assessing civil money penalties. DOL also employs what senior DOL officials have described in various contexts as "shaming." Shaming includes issuing press releases and making all violations available in a publicly-searchable enforcement database. That database has apparently been linked with Yelp! in an app known as Eat, Sleep, Shop, which allows consumers to search for restaurants, hotels, and retailers in a location, then view both their Yelp rating and their enforcement history.
The app's synchronization of quality ratings and enforcement data puts employers' reputations on the line in a way that simply cannot be duplicated by issuing a press release. It is at the consumer's fingertips at the moment the decision is made as to where someone should eat, sleep, or shop. The placement of an employer's reputation on the line (as well as its pocketbook) in an investigation makes it even more critical that employers review their wage and hour practices before WHD shows up at the door. Employers in the hospitality industry need to ensure compliance to preserve their reputations.