Target - The Hospitality Industry

On February 1, 2010 the U.S. Department of Labor (DOL) released its 2011 fiscal year budget which is effective on October 1, 2010. It seeks $25 million dollars for a joint Labor-Treasury initiative to detect, investigate and prosecute employers who misclassify their workers as independent contractors. The Wage and Hour Division of the DOL has also announced that it has “reinvigorated” its enforcement activities. The agency has hired approximately 220 new investigators during the last 18 months and has plans to hire additional agents in the next fiscal year. The focus of these investigations will be on the frequency of federal wage and hour law violations pertaining to the payment of overtime, minimum wages and child labor laws.

Following a significant increase in funding and staffing, the DOL Wage and Hour Division and the Treasury Department are preparing for initiatives that target traditional low wage industries that are classified as high risk in regard to the frequency of federal wage and hour violations, immigration laws and independent contractor regulations.

On October 1, 2010, these federal agencies will begin to conduct focused investigations and audits of businesses in the entertainment, restaurant and lodging industries (Hospitality Industry). The investigators will be auditing these employers for violations of overtime rules, minimum wage, classification of exempt and non exempt positions, child labor, immigration and independent contractor laws.

All Hospitality Industry employers should act now to prepare for these federal audits and investigations. Prior to October 1, 2010, employers should perform comprehensive Human Resources audits to review their employment policies, hiring practices and record keeping procedures to verify that they are in compliance with all applicable Federal and State regulations. A comprehensive Human Resources audit will help employers accurately assess potential exposure and allow them to take proactive steps to remedy any violations in advance of a government audit. Employers who violate these statutes may be liable for federal lawsuits, fines, penalties, civil litigation and personal liability.

A company’s best defense against the potential expense and aggravation related to federal law violations is to proactively review and revise as needed their Human Resources policies, hiring procedures, compensation, benefits, training programs, communications tools and other functions. The professionals of PHHR are ready to assist your organization maintain compliance with the latest state and federal mandates.

For assistance with any Human Resources related questions or other issues, please Contact Us.

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Paul Hilton is a certified Human Resources Consultant, located in Columbia, SC.
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