US Labor Department lawsuit alleges hotel owner owes $200K in wages, damages to 192 workers at 13 hotels

FARGO, N.D. — The U.S. Department of Labor and the U.S. Attorney for the District of North Dakota sued Bharat I. Patel and alleged his failure to pay 192 workers minimum wage and/or overtime rates at 13 hotels he owns in North Dakota and Montana. An investigation by the Wage and Hour Division found approximately $100,000 in back wages and an equal amount in liquidated damages owed to front-desk clerks, housekeeping staff and other hotel employees.

"The hospitality industry is staffed by hard-working, low-paid employees who deserve fair compensation for long hours," said Charles Frasier, district director for the Wage and Hour Division in Denver. "To obtain compliance in the hotel/motel industry, the Wage and Hour Division will use every tool available to ensure workers receive the wages they earned."

The complaint alleges Patel violated the Fair Labor Standards Act by incorrectly classifying some workers as exempt salaried employees. This practice resulted in some employees not receiving minimum wage for all hours worked and not being paid any overtime. Hourly employees received straight-time pay for hours worked over 40 in a workweek and were not paid the legally required time and one-half. Additional overtime violations occurred when Patel failed to combine hours for employees who worked at two locations in the same workweek. The company also failed to maintain accurate records of all hours worked and pay rates.

The hotels involved included Econo Lodge East, Econo Lodge West, Fargo Quality Inn, Super 8 Fargo and Quality Suites, in Fargo; Hampton Inn and Suites, in Jamestown; Travel Inn, Super 8 Motel and Travel Host Motel, which operates as the Relax Inn, in Dickinson; Super 8, in Valley City; Rodeway Inn, in Wahpeton; and the Super 8 Glendive and Comfort Inn Glendive, in Montana. Patel's company has headquarters in Fargo.

The suit was filed in the U.S. District Court for the District of North Dakota. The U.S. Attorney's Office has collaborated with the department in the case's litigation because of the serious and widespread alleged violations.

The FLSA provides an exemption from both minimum wage and overtime pay for workers employed in bona fide executive, administrative, professional and outside sales positions. To qualify for an exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. Job titles do not determine exempt status.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular hourly rates for hours worked beyond 40 per week. The FLSA provides that employers who violate the law are, as a general rule, liable to employees for their back wages and an equal amount in liquidated damages. Liquidated damages are paid directly to the affected employees. Additionally, the law requires employers to maintain accurate time and payroll records and prohibits retaliation against employees who exercise their rights under the law.

For more information about the FLSA, visit https://www.dol.gov/whd/ or call the division's toll-free helpline at 866-4US-WAGE (487-9243).

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Perez v. Patel, et al Civil Action Number: 3:14-cv-00122-RRE-KKK