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Hotel Workers Likely to be Considered Employees by DOL

by Lara A.H. Shortz
Hotel Management
August 10, 2015

Lara Shortz's article, "Hotel Workers Likely to be Considered Employees by DOL," was published in Hotel Management on August 10, 2015.

From the article...

"It is has become a regular practice for hotels to outsource entire departments. Today, routinely outsourced departments include: laundry, housekeeping, garage, night cleaning, security, valet, information technology, engineering, retail, grounds-keeping, spa and food and beverage. Some properties even outsource multiple departments to different operators in an effort to manage ever-increasing payroll expenses.

Decisions to outsource have largely been based on cost considerations. However, the practice of outsourcing departments just became significantly more risky for owners/managers. Of course, misclassification claims can (and often do) arise when owners/managers improperly classify employees as independent contractors. On July 15, 2015, the Department of Labor issued Administrator’s Interpretation No. 2015-1, a 15-page memorandum, in an attempt to clarify the economic realities test and provides new guidance on the Fair Labor Standards Act. Significantly, the DOL states that 'most workers are employees under the FLSA’s broad definitions.'” 

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