The U.S. Department of Labor found that two-thirds of the staffing companies that provide employees to north Florida's hospitality industry investigated as part of a new initiative were not in compliance with federal wage and labor laws.
Among the companies found to have violated the federal Fair Labor Standards Act is the Castillo Real resort hotel in St. Augustine.
According to a DOL release, the hotel will pay $17,890 in back wages after it was discovered that employees provided by staffing company Maja LLC regularly were not paid overtime after working more than 40 hours a week providing services such as housekeeping and laundering. Additionally, some weeks employees' wages fell below the federally required minimum wage.
Michael Young, district director of the DOL's Wage and Hour Division's Jacksonville District Office said the practice of using staffing companies to fill positions formerly managed by hotels themselves is becoming more prevalent across the country. The initiative looking into compliance among staffing companies was undertaken in four of the 10 districts in the Southeast.
"We have a non-compliance rate as low as 31 percent, but also as high as 68 percent," Young said, citing the results of the regional initiative.
The investigation into the Jacksonville district, which covers all of north Florida, looked at 44 cases, in which two-thirds of companies were found to have violated federal law.
In the case of Castillo Real, investigators determined that the hotel was liable for repayment of back wages because hotel staff had directly supervised those employed by the staffing agency, creating what Young referred to as "joint employment relationship."
"In the purest sense of staffing company relationships, generally the using company tries to avoid the responsibility of the employers by staying out of the direct supervision of the employees or payment," Young said. "However, we found there was enough direct supervision by Castillo Real employees on the staffing company's employees to then create an employment relationship."
Based on that relationship the hotel was found liable for the repayment of back wages.
The division is conducting outreach to workers, community organizations, immigrant rights groups, and other stakeholders to inform them of the ongoing initiative and encourage their participation in promoting industry wide compliance.
Young said that while there is a large percentage of immigrant employees in the hospitality industry, the department does not look at the immigration status of employees when investigating potential labor law violations.
Calls to the Castillo Real and Impact Properties, Inc., which manages the hotel, were not returned in time for publication. The investigation into Castillo Real was completed in October 2012.
