Tennessee resort that misclassified workers will pay $55K in back wages to 33 employees after US Labor Department investigation

Employer name: Elk Springs Resort Cabin Rentals LLC  

Investigation site: 1088 Powdermill Road, Gatlinburg, Tennessee

Investigation findings: Investigators from the U.S. Department of Labor’s Wage and Hour Division, Knoxville Area Office, found that Elk Springs violated the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act. The employer misclassified employees working as cabin cleaners, customer service representatives, cabin inspectors, laundry workers, maintenance workers and an operations manager as independent contractors, and failed to pay at least the federal minimum wage of $7.25 per hour and overtime compensation at time-and-one-half employees’ regular rates for hours worked beyond 40 in a work week.

Resolution: Elk Springs has agreed to comply with the FLSA, and will pay back wages of $55,586 to 33 employees.

Quote: “Misclassified employees often are denied access to critical benefits and protections to which they are entitled, such as the minimum wage, overtime compensation, family and medical leave, unemployment insurance and safe workplaces,” said Nettie Lewis, the Wage and Hour Division’s district director in Nashville. “Employee misclassification generates substantial losses for federal and state governments in the form of lower tax revenues, as well as to state unemployment insurance and workers’ compensation funds. It hurts taxpayers and undermines the economy.”

Information: More information regarding the Department of Labor’s initiative to combat the misclassification of employees can be found at http://www.dol.gov/whd/workers/Misclassification/index.htm The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates of pay for hours worked beyond 40 per week. Employers are prohibited from retaliating against workers who exercise their rights under the law.

For more information about the FLSA and wage laws or to file a complaint, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243); the Nashville District Office at 615-781-5344 or visit http://www.dol.gov/whd.