Violations leave hundreds of limo chauffeurs below minimum wage

LAS VEGAS — Like neon lights, slot machines and high-stakes gamblers, chauffeured luxury transportation is a vital feature of the fabled Las Vegas experience. For nearly 500 drivers of one Vegas limousine company, improper payroll deductions and tip credits left many chauffeurs with earnings below the minimum wage, an investigation by the U.S. Department of Labor's Wage and Hour Division found.

The employer, Executive Las Vegas, will pay a total of $232,317 to 479 employees for violating minimum wage regulations after the division's Las Vegas District Office determined the limousine and shuttle bus employer had made payroll deductions for vehicle repairs, uniforms, drug tests, fuel, name badges, cash shortages and water cups. Doing so caused the earnings of hundreds of commission-based drivers to fall below the minimum wage.

Executive Las Vegas also applied an incorrect formula to determine whether employees received enough in tips to support the credit the company claimed against its obligation to pay the minimum wage. As a result, some employees were not paid at least the minimum wage in some workweeks. Finally, the company automatically deducted an hour for lunch whether an employee took a break or not, which resulted in underreporting of actual hours worked.

"Employers need to understand and comply fully with labor laws that apply to their businesses. They must ensure employees receive the wages they deserve," said Gaspar Montanez, district director for the Wage and Hour Division in Las Vegas. "The ground transportation sector is a significant part of the Las Vegas economy and employs many area workers. When full wages are denied, it causes unnecessary stress for workers and hurts their ability to meet financial obligations and provide for themselves and their families. The local economy is also hurt as workers have less to spend at area businesses."

The Fair Labor Standards Act requires that covered employers pay nonexempt employees at least the federal minimum wage of $7.25 for all hours worked, and time and one-half the regular rate of pay for hours in excess of 40 in a workweek. Employers also are required to maintain accurate time and payroll records.

Under the FLSA, tips are the property of the employee who receives them; however, employers of tipped employees can benefit by claiming a credit based on the tips toward their obligation to pay those employees the full minimum wage. If an employee's tips combined with the employer's direct wages do not equal the minimum wage, the employer must make up the difference during the pay period. An employer that claims a tip credit is required to pay a tipped employee only $2.13 an hour in direct wages, provided that amount plus the tips received equals at least the federal minimum wage of $7.25 an hour. Employers and workers in Nevada may want to consult with the state's labor commissioner as some Nevada laws offer more protection to employees. For more information on tipped employees, please consult Wage and Hour's Fact Sheet #15.

For more information about federal wage laws, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243) or in San Francisco at 415-625-7720. Information also is available at http://www.dol.gov/whd/.