Detroit hotel operators to pay $50,000 in worker backpay

The hospitality industry is alive with pushes for increased worker wages, as well as the fight against them, meaning extra scrutiny is being paid to wage relations by both workers and activists. While higher wages are in the limelight, operators need to be vigilant in their record keeping of employee wages, an issue that is now afflicting seven Michigan hotels.

According to the Detroit Free Press, A & M Hospitality Management Grand Hospitality Management and owners Akram Namou and Hikmat Piromari agreed to pay $50,000 in back pay and damages to 96 housekeepers and maintenance employees in a judgment over minimum wage and overtime violations at seven Michigan properties. 

A federal court in Detroit laid down the judgment, which affected a Sleep Inn & Suites, Best Western Hospitality Hotel and Suites, Holiday Inn Express, Hawthorn Suites and Clarion Inn & Suites in Grand Rapids; and the Red Roof Inn and America's Best Value Inn & Suites in Monroe, Mich.

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M Live reported that the violations included instances where employers failed to pay employees for work before and after scheduled shifts and other compensable work time, failure to pay hourly employees for legally required overtime at time-and-a-half for work beyond 40 hours per week, and not combining hours for employees working at two locations in the same workweek to determine if they were owed overtimes. In addition, the employers failed to maintain accurate records of all hours worked.

A & M Hospitality, Grand Hospitality, Namou and Piromari signed a consent judgment in Detroit's U.S. District Court, and agreed not to violate the Fair Labor Standards Act going forward, while also pledging to make changes in its business practices to ensure compliance at all locations. The companies will hire a director of compliance through a certified public accountant for training, and also to conduct self-audits of payroll records. Employee handbooks will also be revised.

Last year the American Hotel & Lodging Association began advocating for the establishment of the 40-hour work week, and hotels should prepare for potential hiccups in overtime reporting as the process continues.

"With this resolution, my clients remain committed to providing the fairest, most welcoming and accommodating work place as possible to all of their employees, along with the most efficient and accurate payroll services available," Patrick N. Butler, lawyer for A&M Hospitality and Management, Grand Hospitality Management, Akram Namou and Hikmat Piromari said in a statement. "However, in organizations with multiple employees, minor oversights are bound to occur."