New York City hotel management company denied employees overtime pay, benefits by misclassifying them as independent contractors

NEW YORK – A federal investigation has recovered $113,613 in back wages and liquidated damages for 71 employees of a New York City hotel management company that denied them their full-earned wages, including overtime, by misclassifying many of the affected workers as independent contractors.

An investigation by the U.S. Department of Labor’s Wage and Hour Division determined that Greenparc Hospitality NY LLC – a provider of hospitality staff to about 20 hotels in Manhattan and at John F. Kennedy International Airport – violated the federal law when it misclassified 69 of the affected employees. By doing so, the Manhattan-based employer paid the workers – bell staff, housekeepers, and room attendants – straight pay for all hours worked even those above 40 in a workweek.

Greenparc also did not include incentive pay such as shift pay for overnight work, quarterly bonuses, and performance bonuses when calculating the amount of overtime due to 28 of the 71 employees. The violations led the division to recover $56,806 in back wages owed and assess an equal amount in liquidated damages.

“Misclassifying workers as independent contractors is a serious concern for the U.S. Department of Labor. It denies employees minimum wages, proper overtime pay and other benefits such as unemployment insurance and workers compensation. It can decrease social security contributions and benefits and shift the tax burden from the employer to the employee. Misclassification of workers also undercuts competitors who obey the law,” explained Wage and Hour Division District Director Jorge Alvarez in New York City.

“Our investigation found Greenparc could have avoided these violations and prevented the harm they caused their workers and their families,” he added. “The Wage and Hour Division encourages employers and employees alike to contact us to understand their responsibilities and rights under federal law.”

The FLSA requires that most employees in the U.S. be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the regular of pay for all hours worked over 40 in a workweek.

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Employers and workers can call the division confidentially with questions regardless of where they are from. The department can speak with callers confidentially in more than 200 languages through the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Download the agency’s new Timesheet App for i-OS and Android devices – now available in Spanish - to ensure hours and pay are accurate.

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