Published on:

Hotel Labor Lawyer Alert: U.S. Department of Labor targets the hospitality industry

12 July 2010

Hotel Lawyer with an alert about the DOL’s historic action targeting hotels.

The U.S. Department of Labor (DOL) is taking historic action. With a huge increase in funding and staffing, the DOL is specifically targeting audits and enforcement actions for every hotel, motel, and resort in the U.S. The program will search for violations of overtime rules, minimum wage, and classification of exempt and non-exempt positions. In addition, one of the primary focal points of these audits will be employers with workers holding H-2B visas.

Hotel labor lawyer Marta Fernandez and hotel lawyer, Jim Abrams, both senior members of the JMBM Global Hospitality Group®, say, ” We expect that the DOL compliance audits will cover all of the laws administered by the DOL and WHD including H-2B labor certification wage requirements and other federal laws such as minimum wage, overtime, and family and medical leave.”

In today’s Alert, they also suggest “4 Things that you should do now — Before it is too late.”

For other articles on hotel labor law issues, please go to, click on the “HOTEL LAW TOPICS” tab at the top of the home page, and then select “Labor & Employment” or just click here. (

Hotel Labor Lawyer Alert: U.S. Department of Labor targets the hospitality industry

  • Employers need to prepare for impending audits and enforcement actions
  • H-2B visa program is being scrutinized

The Department of Labor’s (DOL) Wage and Hour Division (WHD) has experienced a huge increase in funding and staffing, adding hundreds of new investigators, and is gearing up for a new wave of compliance audits and enforcement actions.

Specifically targeting the hospitality industry, the WHD plans to audit hotel employers for violations of overtime rules, minimum wage, family and medical leave, classification of exempt and non-exempt positions, and virtually every Federal labor wage and hour regulation.

Because the DOL is also in the process of drafting new regulations for the H-2B visa program — a program relied upon by many employers in the hospitality industry — it is likely that employers with workers holding H-2B visas will be scrutinized for violations under the H-2B program during the audit process.

Here is the information that Jim Abrams and Marta Fernandez have provided, including the “4 things you can do now, before it is too late.”

Every hotel, motel and resort in the U.S. will be targeted – audits, enforcement actions and plaintiff litigation

According to the American Hotel & Lodging Association (AH&LA) in a bulletin issued on June 21:

. . .The U.S. Department of Labor (DOL) is planning an initiative that specifically targets every hotel, motel and resort in the United States for audits by the department’s Wage and Hour Division.

. . . DOL has labeled the lodging industry as a “high-risk industry” where violations of federal wage and hour laws are most likely to occur. The department has chosen to consider employees in the lodging industry as “the most vulnerable workers” in the country. As a result, you will be subject to a DOL audit, covering all of your employees.

This looks to be an all-out campaign against hotel employers. The WHD 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 AH&LA is urging hotel employers to contact their elected officials and urge them to contact the DOL to express opposition to the hospitality industry being singled out for compliance audits.

The H-2B workers program is being scrutinized

The H-2B working visa is a nonimmigrant visa which allows foreign nationals to enter into the U.S. temporarily and engage in nonagricultural employment which is seasonal, intermittent, a peak load need, or a one-time occurrence. Many hotels rely on the H-2B workers program to meet their needs under these requirements.

In January 2009, the Department of Homeland Security delegated to the DOL the responsibility for enforcing compliance of the H-2B labor certification requirements. The DOL’s WHD may impose wage payments and civil money penalties against employers who violate certain H-2B provisions.

The DOL is in the process of drafting new regulations for the H-2B program. The proposed new regulations will not be released until November 2010 and what they will look like or how they will impact the hospitality industry — as they surely will — is unknown.

We are aware that plaintiff groups have filed lawsuits against hotel employers with H-2B workers, alleging violations that are surely to gain the attention of the WHD. Whether private lawsuits exist against hotels or not, compliance with H-2B labor certification requirements will certainly be reviewed in the pending hotel audits by the WHD.

4 things you can do now – before it’s too late:

  1. Perform an internal audit. Talk to your hotel labor lawyer who can organize an internal audit of your payroll practices, hiring practices, and recordkeeping procedures and then help ensure that your organization is in compliance with Federal laws, including H-2B requirements. It is important that you avoid precipitous action to terminate any employees that do not meet the H-2B visa requirements, because there are anti-discrimination laws that also apply to any termination based on immigration status.
  2. Understand your exposure. Hotels that use outside staffing agencies to hire employees face certain risks as well since they can be held responsible for failure on the part of the agency to comply with federal regulations. Also, employers with collective bargaining agreements may need to involve the union on various aspects of the audit, including H-2B visa employees if they are part of the “represented workforce.”
  3. Develop a strategy. Experienced hotel labor lawyers can let you know what to expect in a government compliance audit and should help you prepare a strategy for successfully cooperating with all phases of the audit. Your management team should be alerted so that no one panics when the audit notice is received, and they know the importance of getting it to the right person quickly so you can promptly launch the action plan you developed.
  4. Get involved. The American Hotel & Lodging Association (AH&LA) is urging hotel employers to ask their elected officials to contact the U.S. Department of Labor on their behalf to express their opposition to the hospitality industry being singled out for compliance audits. AH&LA is the primary advocate of the hospitality industry in Washington D.C., giving a voice to thousands of individual hotels and owners. The Association’s success depends on the number of people in the industry that become involved and support the Association’s important work. To get involved and become a member of the AH&LA you can register on their website at

We can help

JMBM’s hotel labor lawyers understand how hotels operate and how to effectively work with hotel management and their human resource professionals. Our hospitality lawyers are familiar with the operations of countless hotels, of all sizes and classes. We understand exactly how labor and employment law issues intertwine with hotel operations, affecting areas that might surprise labor and employment lawyers serving other industries.

We invite you to contact Marta Fernandez or Jim Abrams to discuss how to efficiently perform an internal audit, how to accurately assess your exposure and what steps should be involved in your strategy for responding to an audit notice from the DOL.

Fernandez%20Marta_Bio.jpgMarta Fernandez is a partner in JMBM’s Employment and Labor Department and a senior member of JMBM’s Global Hospitality Group®. As a management labor lawyer with more than 20 years of experience, Marta specializes in representing hospitality industry clients in all aspects of labor and employment including labor-management relations such as union prevention, collective bargaining for single as well as multi-employer bargaining units, neutrality agreements and defense of unfair labor practice charges before the NLRB. She defends employers in administrative and litigation claims, such as employee claims of sexual harassment and discrimination and counsels clients in preventative strategies such as executive training, arbitration enforcement, and policies and procedures. For more information, please contact Marta Fernandez at 310.201.3534 or at

Abrams%20Jim%20resized%20for%20web.jpgJames Abrams is Of Counsel at JMBM and is a senior ember of JMBM’s Global Hospitality Group®. Jim has served the hospitality industry for 40 years and specializes in lodging and hospitality law and in representing and advising trade associations and other non-profit entities. Jim has significant experience in government affairs at the national level, the state level – including the California Legislature and scores of state agencies – and with local governments and agencies. He has authored successful ballot measures and scores of bills for his clients. Jim served as the President and CEO of the California Hotel & Lodging Association from January 1, 1991 through December 31, 2008 and is currently an adjunct professor in the Hospitality Industry Management Program at the University of San Francisco. He is a frequent speaker and writer on all aspects of the law relating to the lodging and hospitality industries, and he is the author of the book Laws Pertaining to the California Innkeeper, which is published by the California Hotel & Lodging Association. To read Jim’s articles, go to For more information, please contact Jim Abrams at (415) 398-8080 or

This is Jim Butler, author of and hotel lawyer, signing off. We’ve done more than $60 billion of hotel transactions and have developed innovative solutions to unlock value from troubled hotel transactions. Who’s your hotel lawyer?

Our Perspective. We represent hotel lenders, owners and investors. We have helped our clients find business and legal solutions for more than $60 billion of hotel transactions, involving more than 1,000 properties all over the world. For more information, please contact Jim Butler at or 310.201.3526.

Jim Butler is a founding partner of JMBM and Chairman of its Global Hospitality Group®. Jim is one of the top hospitality attorneys in the world. GOOGLE “hotel lawyer” and you will see why.

JMBM’s troubled asset team has handled more than 1,000 receiverships and many complex insolvency issues. But Jim and his team are more than “just” great hotel lawyers. They are also hospitality consultants and business advisors. For example, they have developed some unique proprietary approaches to unlock value in underwater hotels that can benefit lenders, borrowers and investors. (GOOGLE “JMBM SAVE program”.)

Whether it is a troubled investment or new transaction, JMBM’s Global Hospitality Group® creates legal and business solutions for hotel owners and lenders. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them.