Hourly workers make up a significant portion of U.S. hospitality labor compensation. In an industry where profit margins are in the single digits, keeping track of labor costs is crucial to the survival of any hospitality business. As such, hotels and restaurants use a variety of different solutions to manage labor, allowing them to do everything from forecasting labor needs for a given shift, to monitoring hours-worked to avoid paying overtime. Despite these efforts, or in some cases because of poor efforts, hospitality businesses do find themselves involved in labor disputes over hours-worked, compensation, and overtime.
Feds release labor app
On May 9, 2011, the U.S. Department of Labor released a free smartphone app, “DOL Timesheet,” that helps employees to keep track of their hours, independently from their employer, and determine what they should be getting paid. In the press release, the Department of Labor says: “This new technology is significant because, instead of relying on their employers’ records, workers now can keep their own records. This information could prove invaluable during a Wage and Hour Division investigation when an employer has failed to maintain accurate employment records.” Secretary of Labor Hilda L. Solis goes on to say, “I am pleased that my department is able to leverage increasingly popular and available technology to ensure that workers receive the wages to which they are entitled. This app will help empower workers to understand and stand up for their rights when employers have denied their hard-earned pay.”
The app’s ability to hold up in court remains to be seen. A disclaimer on the DOL’s own website states that the app is provided as a public service and that “the conclusions reached by this app rely on the accuracy of the data provided by the user. Therefore, we make no express or implied guarantees.” The app is not all-inclusive of compensation scenarios; by its own admission, DOL-Timesheet does not handle items such as tips, commissions, bonuses, deductions, holiday pay, pay for weekends, shift differentials, or pay for regular days of rest.
Despite any shortcomings, however, the app is aimed squarely at empowering employees. In addition to tracking hours and wages, the app contains a glossary of wage and hour terms; it informs workers about their rights under the Fair Labor Standards Act (FLSA); it provides a phone number and e-mail to contact the DOL’s Wage and Hour Division; and it specifically instructs employees on how to file a wage violation complaint. The app shines light on the fact that employers can, and do, fail to maintain accurate employment records, and it promotes greater accountability on their parts.
A simple search in the LexisNexis Legal Case database reveals 47 current cases of overtime lawsuits against restaurants and 40 against hotels. One such case details that of an illegal immigrant who sued a hotel company for violating the wage and overtime provisions of the FLSA and sought to recover unpaid back wages plus liquidated damages and attorneys’ fees. The claim was denied at first, but a higher court reversed the decision and concluded that undocumented workers are “employees” within the meaning of the FLSA, and that such workers can bring an action under the act for unpaid wages and liquidated damages.
According to Hospitality Technology’s 2011 Lodging Technology Study, 40% of hotel executives are unable to agree with the statement, “My company uses labor management tools effectively.” Hospitality businesses are encouraged to leverage labor management tools and revisit any tools that may already be in place. For restaurants, a point-of-sale system can be a great tool for keeping track of labor hours. Some solutions can alert managers via text (SMS) or e-mail when an employee is nearing the overtime limit. Time history can even be shared with employees as a weekly e-mail or text message, promoting complete transparency and helping to avoid disputes.
The use of sophisticated tools will not only help hospitality businesses avoid law suits and better forecast labor; it will empower them to be better employers. In the age of smartphones and ubiquitous network access, it’s a smart business choice to leverage labor management technology.
Cihan Cobanoglu, Ph.D., CHTP is Dean of the School of Hotel & Restaurant Management, University of South Florida Sarasota-Manatee. Share your questions and comments with Dr. Cobanoglu online at htmagazine.com or e-mail him directly at email@example.com.
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