Rebecca Bromet Published in Hospitality Law
"Ensure Contractors are Following FLSA Rules and Regulations"

Rebecca Bromet's article, "Ensure Contractors are Following FLSA Rules and Regulations," was published in the August 1, 2009 digest of Hospitality Law. Her article discusses how, during a recent audit by the U.S. Department of Labor's Wage and Hour Division, one hotel found itself questioned about the timekeeping and payroll practices of their housekeeping subcontractors. According to Rebecca, the relationship between a hotel and the contractor is inevitably governed by a contract, which typically provides that the hotel should not be considered the employer of any of the contractors' employees and requires the contractor to comply with all relevant laws, including wage and hour laws. Rebecca contends, "Although it seems like the parties should be able to determine by contract which entity is an employer, it is not necessarily so." She notes that under the Fair Labor Standards Act (FLSA) and many state wage and hour laws, an individual worker may be employed simultaneously by two or more entities. Rebecca also explained that whether an entity is an "employer" under the FLSA depends on the "economic reality" of the relationship between the entity and the individual worker.

Rebecca recommends in her article that hotels concerned about joint employment should consider, at a minimum, the factors used by the Circuit in which they are located, and hotels that have operations in multiple states should apply all of the same factors, as well as any additional factors under relevant state laws. Rebecca contends that in the end, the "economic realities" of a situation will be fact-driven. Rebecca concludes, "perhaps the best practice for any hotel is to ensure it contracts only with reputable contractors. To the extent that both the contractor and the hotel are complying with the FLSA and analogous state laws, the DOL, state authorities and plaintiffs' lawyers will be less likely to pursue claims for purported wage and hour violations."