The title of this post sounds like the introduction to a joke. “What does Enterprise-Rent-A-Car and a St. Louis hotel operator have in common?” It’s no joke however. Both companies are headquartered in St. Louis and both call their employees managers. Enterprise does so as a marketing ploy, however, and understands that its workers are entitled to overtime if they work more than 40 hours in a week. The hotel operator, SASAK Corporation, actually thought by labeling desk clerks and housekeepers as managers it could avoid overtime.
Fair Labor Standards Act and Overtime
The federal Fair Labor Standards Act (FLSA) was passed during the Great Depression. The law says that people who work more than 40 hours in a 7 day period should be paid for their actual hours worked and receive time and one half pay for those hours in excess of 40. Like all federal laws, there are exceptions. One of the biggest exceptions is for managers.
The FLSA exempts salaried managers from the requirement that they be paid overtime. Whether a salaried manager works 30 or 60 hours, they are only entitled to their salary. Calling all employees “managers” simply to avoid overtime doesn’t fly, however.
SASAK operates three motels including a Super 8 and a Howard Johnson. According to a complaint filed by the U.S. Department of Labor, SASAK engaged in wage theft by labeling housekeepers, front desk clerks and laundry workers as managers.
According to the FLSA, a true manager typically manages a department or unit, has two or more employees under direct supervision and can hire or fire or have direct influence over hiring / firing decisions. SASAK hotel workers have none of these attributes.
According to the complaint, some workers lived on the property and were required to work around the clock.
When a employer engages in wage or overtime theft, the FLSA allows workers to receive double back pay. The employer must also pay the workers’ legal fees. In this case, SASAK settled by agreeing to pay $200,000 to 51 workers. The average worker will get approximately $4000. In settling the case, SASAK agreed to reclassify its workers as non-managers and pay them overtime going forward.
In announcing the settlement, a Department of Labor spokesperson said, “The resolution of this investigation is a win for workers and for law-abiding employers. The violations found in this case are all-too-common in the hotel industry, where we often find some of the most vulnerable workers we see.”
We agree. Hotel workers are often victims of overtime and wage theft. Under the FLSA employers can be forced to pay the workers’s legal fees but many workers don’t understand their rights. They also worry about retaliation. (The FLSA has anti-retaliation provisions too.)
If you are the victim of overtime or wage theft or believe you are improperly classified as an independent contractor, you may have important rights under the Fair Labor Standards Act. Some states, such as California, may give local workers even more rights.
MahanyLaw – FLSA Wage Theft Lawyers
The lawyers at MahanyLaw have the experience to take on big corporations and powerful employers. Our mission is simple, protect the rights of workers and make sure wage theft claims are fully prosecuted.
For more information, contact attorney Katherine Holiday at or by telephone at (414) 258-2375. Individual wage theft claims prosecuted in Wisconsin and Illinois, class or collective actions cases handled nationwide. (If there are multiple workers with similar duties or titles, chances are good that you have a class case. Don’t worry about signing up additional workers, that is our job.)
MahanyLaw – America’s FLSA and Wage Theft Lawyers