Department of Labor finds two employees worked for free to pay for hotel lodging, Michigan operator denied them and other workers full wages

IONIA, MI ‒ The U.S. Department of Labor has recovered a total of $110,000 in back wages and liquidated damages for six employees of an Ionia hotel, including two who worked there for more than 40 hours per week for nearly 10 months without pay. The couple thought they were working in exchange for free lodging at the hotel, but the hotel still charged them for their stay on some nights they worked.

An investigation by the U.S. Department of Labor’s Wage and Hour Division determined Ionia Hotel Business Inc., operating as American Inn and Suites, and its owner Manhal Kashat, did not pay four workers minimum wage or overtime and paid the couple nothing from March 2020 to December 2020. Following the investigation, department attorneys filed a complaint in the U.S. District Court for the Western District of Michigan in January 2023.

On April 3, 2024, Judge Paul L. Maloney signed a consent judgment submitted by the department, Ionia Hotel Business and Kashat. The consent judgment requires the company to pay the back wages and agreed to forgive workers’ hotel bill. The company has also agreed to future compliance with the Fair Labor Standards Act and to provide employees information on wage laws and their rights. 

“Complying with federal laws protecting workers’ wages and other rights is never negotiable,” explained Wage and Hour Division District Director Mary O’Rourke in Grand Rapids. “Workers must be paid at least minimum wage and compensated for overtime unless they meet very specific criteria. We encourage employers and workers with questions about workers’ rights to contact the Wage and Hour Division for guidance. Our assistance is available in many languages.”

“The Fair Labor Standards Act has specific requirements for employers seeking to take a credit for providing lodging to their employees,” added Regional Solicitor of Labor Christine Heri in Chicago. “This case demonstrates the department’s commitment to holding employers legally accountable when they fail to meet those requirements or ignore their other responsibilities required by law.”

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 and how to file an online complaint. For confidential compliance assistance, employees and employers can call the agency’s toll-free helpline at 866-4US-WAGE (487-9243), regardless of where they are from.

Download the agency’s new Timesheet App for iOS and Android devices in English or Spanish to ensure hours and pay are accurate.