- The operator of the MStar Motel in Searcy, Arkansas, has paid $53,055 in back wages to 11 employees to settle claims that it violated the Fair Labor Standards Act (FLSA), according to a statement from the U.S. Department of Labor's (DOL) Wage and Hour Division (WHD).
- WHD investigators said the employer failed to pay employees the federal minimum wage; paid employees a flat salary regardless of hours worked, which resulted in overtime violations when employees worked more than 40 hours in a workweek; and made a monthly deduction from employees' pay for employer-provided lodging without regard to the actual costs of the housing. The employer required workers to live on site.
- Investigators also found the employer failed to keep accurate records of employees' work hours, according to the statement, and failed to display required FLSA information.
Employer-provided lodging is common in some industries, but employers that wish to count lodging and related expenses as wages must meet several requirements, according to a DOL Field Assistance Bulletin.
According to the agency, business must ensure: the lodging is regularly provided by the employer or similar employers; the employee voluntarily accepts the lodging; the lodging is furnished in compliance with applicable federal, state or local law; and the lodging is provided primarily for the benefit of the employee rather than the employer.
Moreover, employers must maintain accurate records of the costs incurred in furnishing the lodging. Records may include proof of mortgage or rental payments and utility bills, according to DOL. If an employer does not provide records to support its claim of a lodging credit, the employer has not met the prerequisite for including lodging costs in employees' wages, the agency said.