MCM Elegante and MCM Grande Hotels in New Mexico and Texas have paid $78,876 in overtime back wages to 200 dishwashers, bartenders, wait staff, bellmen, housekeeping, and maintenance workers following an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD).
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Employees in Albuquerque, New Mexico and several cities in Texas, were not properly paid wages they were due. The hotels are owned by HTL Operating LLC, based in Odessa, Texas.
As a result of the investigation, the employer has agreed to comply with the FLSA at all of its locations. It will pay the back wages found due in full.
Investigators found that the MCM Elegante and MCM Grande Hotels paid housekeeping staff a flat rate per room cleaned, without regard to the number of hours worked. When these employees worked more than 40 hours in a week, the employers continued to pay only this flat rate, failing to pay overtime at one and one-half times the employees’ regular rates of pay, as required by the FLSA. A housekeeper paid $3 per room, cleaning three rooms per hour, would earn $450 for a 50-hour week at the piece rate, without overtime. The employee would legally be due $495, a shortage of $45.
The employers also allegedly failed to pay proper overtime to servers when they based their overtime rates on time and one-half their direct cash wages, rather than the full minimum wage. Tipped employees may be paid as little as $2.13 per hour directly by the employer, provided that they collect enough in tips to earn the federal minimum wage of $7.25 per hour. Overtime must be computed on the full minimum wage.
Furthermore, investigators reported the hotels failed to include incentive pay they had paid to employees in their regular rates of pay when computing overtime, and failed to maintain accurate records of employees’ wages and work hours, as required by the FLSA.
According to the WHD news release, the division is concerned about the severity of noncompliance in this industry and is concentrating its resources on identifying and remedying violations, informing workers of their rights and providing compliance assistance to employers. Since 2009, the division has conducted more than 4,000 investigations of hotel and motel employers, resulting in more than $12.4 million in back wages recovered for more than 23,000 workers nationwide.