Property management company to pay $200k in back wages, damages following US Labor Department investigation

ST. LOUIS – Significant minimum wage and overtime violations found at three hotels owned by SASAK Corporation, led the company to sign a settlement agreement with the U.S. Department of Labor’s Wage and Hour Division. The agreement requires the St. Louis-area property manager, developer and investor to pay $200,000 in back wages and damages to 51 housekeepers, front desk clerks and laundry service employees. SASAK will also make significant changes in its business practices to ensure compliance with the Fair Labor Standards Act.

Investigators found violations at two St. Louis hotels, the Super 8 on Charles Rock Road and the Robinson Motel on Page Avenue; and at the Howard Johnson hotel on East Diamond Drive in Salina, Kansas – all of which are owned and controlled by SASAK.  

The investigations found SASAK violated minimum wage, overtime and recordkeeping requirements of the FLSA at the three properties when it labeled housekeepers and front-desk employees as managers, and then payed them flat salaries without regard to the number of hours they worked. Minimum wage violations resulted when those salaries, divided by the number hours employees actually worked, failed to cover all of their hours at the federal minimum wage of $7.25 per hour. Overtime violations occurred when the employees worked more than 40 hours in a week yet the employer failed to pay an overtime premium. Many of these workers resided on the premises and were expected to be available around-the-clock. Other housekeepers were paid on an hourly or piece rate (per room) basis, and were denied minimum wage and overtime when the employer failed to record or pay for all of the hours that they worked, as required by law.  

“The resolution of this investigation is a win for workers and for law-abiding employers,” said Karen Chaikin, regional administrator for the Wage and Hour Division in Chicago. “The violations found in this case are all-too-common in the hotel industry, where we often find some of the most vulnerable workers we see. Simply paying workers a salary does not mean they are not entitled to minimum wage and overtime. This case sends a clear message that the Wage and Hour Division is committed to using every enforcement tool we have to ensure workers receive every penny they have rightfully earned, and that employers compete on a level playing field.”

The agreement requires the employer to implement enhanced FLSA compliance measures as part of its employment practices, including:

• Adding a notation to the required FLSA poster that informs employees of the name and telephone number of the local Wage and Hour office to call if they have questions regarding their rights under the FLSA.
• Training employees on the employer's record-keeping requirements.
• Providing Wage and Hour Division publications to employees to keep them informed of their rights.

Based in St. Louis, SASAK Corporation specializes in the acquisition, design, development, and management of more than 60 properties in its portfolio which includes shopping centers, office buildings, motels, vacant land, fast food restaurants, mini-storage facilities, gas stations and condominiums.

The FLSA provides an exemption from both minimum wage and overtime pay requirements for individuals employed in bona fide executive, administrative, professional and outside sales positions, as well as certain computer employees. To qualify for 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. In order for an exemption to apply, an employee's specific job duties and salary must meet all the requirements of the department's regulations.

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).