Staying Compliant With Hotel and Casino Wage and Hour Laws
Violating wage and hours laws is expensive. According to a recent legal analysis, the growth in wage and hour suits, along with their costliness, makes them the top exposure risk for companies. The federal government is trying to help with the creation of the Payroll Audit Independent Determination (PAID) program. Yet this program to resolve wage and hour discrepancies without a lawsuit only applies to violations of the Fair Labor Standards Act (FLSA). It has no impact on state law violations, and the state laws can be a messier hodge-podge than the federal laws. Staying compliant takes constant vigilance.
Let’s take a look at some of the most common ways a casino or hotel can fall out of compliance with wage and hours laws.
We list poor record-keeping as the first, biggest risk of noncompliance because it’s the practice that underlies nearly every other potential risk. Maybe your casino is paying dealers overtime properly, but if the casino can’t provide the records to prove it – it doesn’t matter.
Federal and state laws specify the information that must be collected and maintained regarding workers, their hours, wages and benefits. A back-end HR system can collect the more static information, like social security numbers and worker classification. However, it’s the collection of the day-to-day real-time hours worked that’s so critical. Using physical employee time clocks gives credibility to the real-time data collected. When a punch in or out is entered or altered outside of real-time, it’s easy for questions to be raised about its reliability. At the very least, a company not working with real-time time tracking now also needs to provide additional documentation supporting the veracity of the data, which puts additional pressure on both HR and IT staffs to prove compliance.
Mismanaging overtime pay
Overtime pay mismanagement comes in two main flavors: misclassifying workers and not paying overtime hours at overtime rates. Then there are the added wrinkles that various state laws may have different standards and requirements than federal law. For casinos, in particular, there may be confusion where casinos on tribal lands must comply with certain federal laws.
Some workers are entitled to overtime pay, others are not. As the standards and thresholds for which workers are entitled can change, hotels and casinos need to maintain proper classifications and have a payroll system that can easily adjust to reflect a worker’s changing classification.
Accurate and reliable hours tracking is required to ensure that overtime hours are identified and paid for properly on each paycheck. Many hotels and casinos fall afoul of wage and hours laws by not counting time workers have to come in before scheduled hours to prepare for their shift or stay after shift hours to complete certain tasks. If a worker’s schedule is only counted as hours on the floor, there’s a great risk that the hotel or casino is underpaying workers both for hours actually worked and for hours designated as overtime.
Mismanaging meal and other breaks
A sophisticated time tracking application can help any company manage the complicated array of lunch and break laws. Not allowing workers to take required breaks or not paying for breaks when they’re entitled to be paid for them are both serious compliance risks. The back-end scheduling system can help managers design schedules that provide sufficient breaks and service coverage for customers. However, real-time tracking of workers who are punching in and out for meals and breaks helps managers and HR stay on top of compliance in practice. Real-time notifications of workers who aren’t adhering to their break schedule lets them address the issue immediately.
They can also use attestations collected at the time clock during a punch in or out. Workers returning early can attest that they’ve not been required to do so by a manager. Workers returning late can attest that they understand they’re only paid for actual work hours where break time is otherwise unpaid. These attestations help out IT staff by providing another opportunity to collect compliance data in real time. They help out HR by serving as constant reminders to workers of what the meal and break policies are.
Minimum wage laws only allow hour wages below the minimum where added tips can be shown to get workers to the minimum wage threshold. Hotels and casinos that pool tips at the end of shift and then allocate them out need to make sure that only the tip-eligible employees are getting a portion. The companies also have to ensure that tip pool funds aren’t retained in violation of state or federal law.
The bottom line of this is that hotels and casinos need to be able to track employee tip earnings and to document how tip pools are allocated.
Staying on top of the inevitable requirement changes
The perpetual state of flux of both federal and state wage and hour laws requires flexible and responsive back-end systems. Many payroll and HR management solutions build compliance oversight and notifications right into their systems. Thus, you want to select an option that stays current on a timely basis. Even so, it’s the company’s responsibility to ensure compliance. This requires data collection and back-end HR management systems that give the company the flexibility to implement updated workflows, attestations and internal audit procedures quickly and easily. As it becomes harder to insure against noncompliance with wage and hour laws, the risk to hotels and casinos for not managing their own compliance only grows.
While ATS is passionate about time and attendance and excited to support organizations navigate workforce dynamics around timekeeping, we recommend you reach out to yourcountry,regional and/or local HR chapter for more information on common workplace advice and procedures.”