Desert Hot Springs hotel agrees to pay nearly $60,000 in back wages to employees

November 19th, 2013 | by Dominique Fong | Comments

Miracle Springs Resort and Spa in Desert Hot Springs will pay $59,790 for failing to pay overtime wages to 53 employees, the U.S. Department of Labor’s Wage and Hour Division announced Monday.

Investigators found that Miracle Springs Resort and Spa, and nearby Desert Hot Springs Spa and Hotel, were under the same management but recorded employee hours on separate payrolls. When some employees’ hours were combined, the hours totaled more than 40 per week, entitling them to overtime. The employer also deducted a 30-minute break from some employees’ work hours, even when they didn’t take the break.

The employer has agreed to pay full back wages to the affected employees, including maintenance and housekeeping employees. The employer agreed to deduct lunch breaks only when employees take the break, according to a news release.

The hotel and motel industry employs many low-wage workers who may not know the law well or may be unwilling to exercise their rights and are vulnerable to labor violations, the department said.

Under the Fair Labor Standards Act, employees have to be paid at least the $7.25 per hour federal minimum wage and one and one-half times their regular rate for every hour of overtime.

The Wage and Hour Division works to find and remedy violations, informing workers of their rights and helping employers comply with the law.

Update 12:40 p.m., Nov. 20: The hotel paid the total $59,790 in March and has improved its computer accounting system to accurately reflect overtime wages for full-time employees, said Gene Grant, spokesman for Miracle Springs Resort and Spa.

Grant said Wednesday that the Department of Labor had attributed $48,702 to five independent contractors, including IT and construction personnel, who were under separate agreements with the hotel and should not have been counted as full-time employees.

“That was, in effect, what they would have been paid if they had been employees,” Grant said.

The rest of the amount, $11,088, was related to 48 full-time employees who filled in for shifts at the nearby Desert Hot Springs Spa and Hotel over a two and half-year period. Grant said the two hotels are under separate ownership.

“The mistake was there were separate computer and accounting systems,” Grant said. “They should have included calculations for overlap, which they have subsequently done.”

Business reporter Dominique Fong can be reached at (760) 778-4661, and on Twitter @dominiquefong.

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