HOUSTON — U.S. hospitality employers face an ever-evolving labor law and general operations landscape, requiring them to stay constantly aware of the newest conditions.
At the Hospitality Law Conference, hospitality-focused attorneys spoke about the most frequent questions they face and most common mistakes they see employers make.
Accommodating employees and clients
There’s a mix of new and old legislation that requires businesses to provide certain accommodations to their employees and to consumers, said Andria Ryan, labor attorney and partner at Fisher Phillips. The Civil Rights Act of 1964 outlines requirements regarding employees’ religion, the American Disabilities Act from 1990 for common employee disabilities and the Pregnant Workers Fairness Act from 2023 for limitations related to pregnancy.
Businesses have the responsibility to accommodate their employees and customers as outlined in these laws unless they can prove they are unreasonable and an undue hardship, she said.
Even sophisticated employers have trouble seeing the need for accommodations and recognizing that’s what’s being asked of them, she said.
“Because when they’re being asked for an accommodation, they’re being asked to treat someone at one particular point differently than they’re treating everyone else, and that goes against common sense,” she said. “The way to avoid claims is to treat employees exactly the same — except when they ask for these kinds of changes.”
Most workplace religious accommodations are schedule issues, Ryan said. Typically, it’s an employee who can’t work certain days, such as sundown Friday to sundown on Saturday. In hospitality, employers often say that’s not possible because everyone works weekends.
The solution is creative scheduling, especially knowing that this employee would be able to work Sundays, which is not a day most people want to work, she said. It’s difficult to prove an undue hardship in this circumstance.
The ADA is clear that employers are obligated to engage in an interactive process with employees who have a medical condition, be it physical or mental, that interferes with a basic life activity, Ryan said. This can include having cancer, being hearing and/or sight impaired, having anxiety or ADHD, among other conditions.
Employers have to determine whether they can accommodate the disability by altering the job so the employee can do the job, she said.
The accommodations for limitations related to pregnancy are different, Ryan said. The ADA doesn’t require employers to change the job itself for accommodations, but the PWFA does because it’s a limited amount of time.
“You have to make changes to the job, lower production standards, light-duty type work,” she said. “It needs to be considered for pregnant employees.”
Wage and hour compliance
The top five mistakes employers make deal with tip credits/tip pooling, child labor laws, meal and rest periods, working off the clock and overtime exemptions, Ryan said.
The federal tip credit allows employers to pay tipped employees below the $7.25 minimum wage, but some state laws don’t allow tip credits and some have higher minimum wages, she said. Employers must also provide notice of using the tip credit in writing.
Tip pooling is when a workplace collects all the tips employees earn into one pot and then distributes them among the workers, she said. The biggest mistake employers typically make here is including non-eligible employees in the pool, namely managers and supervisors.
“It’s akin to the company taking a portion of the tip pool, which you cannot do,” she said. “That’ll completely invalidate the tip pool.”
When hotel companies employ workers younger than 18, they need to be mindful of the restrictions placed on these employees both in the work they can do and the hours they can work, she said. They can’t work hazardous occupations, which would include things like not using trash compactors or certain kitchen equipment.
Minors also have restrictions on the hours they can work during the school year and outside of the school year, she said. The U.S. Department of Labor takes a close look at violations of this, and it can even just be a matter of working minutes past the required time to clock out.
“If they're working past the clock out at 7:06 and they're supposed to clock out at 7 o'clock, that's a violation,” she said.
Federal law does not require meal breaks or rest breaks except for lactation purposes, Ryan said. Many state laws, however, require it, and California and Colorado have strict laws for meal and rest periods.
Even though federal law doesn’t require it, employers should develop a policy and stick with it, she said. They should also be mindful of time keeping systems that auto-deduct breaks from an employee’s hours, because if the employee works through lunch partially or fully, that could put hem into overtime territory. In these situations, employers can turn off the auto-deduct or have employees inform payroll about the missed break.
Technology has made it easier for managers to reach out to their employees, but Ryan said she always tells them not to call their non-exempt/hourly employees about work when they’re off duty. If they do, they need to have the employee clock-in or record the time because they have to capture that work.
“We're talking about when they're at home,” she said. “We're talking about pre-shift, post-shift time that that needs to be compensated.”
When it comes to overtime, the default position is every employee is eligible unless they fit one of the limited exemptions that make them a manager, an executive, an administrative employee or sales employee, among others, she said. Misclassification is a common problem, and it comes with a potential three-year back wage period as well as liquidated damages and attorneys fees.
Immigration raids
The country saw U.S. immigration and Customs Enforcement agents in the streets of major cities such as Minneapolis, pulling over people seemingly at random, said Justin Bragiel, general counsel and legislative director for the Texas Hotels & Lodging Association. While ICE agents aren’t taking this approach as much anymore, that doesn’t mean that targeted action against employers has calmed down.
“There’s still quite a bit of that,” he said. “It’s just how this is being interpreted, and the approach has shifted. So, as employers, we still need to pay very, very close attention and be aware that this is occurring.”
One way the U.S. federal government will engage with employers about the immigration status of workers is through I-9 audits, which starts with a notice of inspection, Ryan said. This approach is nothing new, and has slowed down in many cases because the E-Verify platform is a fairly fail-safe method to make sure employers are in compliance. A notice of inspection should prompt employers to leap into action to produce the documents requested.
I-9 audits are not the same thing as a raid or having a warrant served, she said. The first involves investigators while the later involves agents with badges and guns.
“A raid is going to require a judicial warrant, and how many of us have seen a judicial warrant?” she asked. “Probably just a handful, but as we’ve told operators, a warrant means someone has probable cause to come to your workplace and ask for paperwork, for people.”
Those being served a warrant have the right to ask for a copy of the warrant, she said. It will say warrant on it, and it will be signed by a judge. It can be a scary situation for a front-desk agent facing this situation, so with every operation, a high-level manager along with a backup high-level manager should be designated the point person to meet with any government investigators, particularly those serving a warrant.
Agents can’t go into private or non-public areas without a warrant, but they can be in public areas like the lobby, restaurant or possibly guest floors if they’re not key-protected, Ryan said. Private areas would be places such as back-of-house spaces, kitchens and loading docks. Operators should walk their properties and add signage that says employees, staff or even guests only.
Operators should limit access to agents with a warrant only to the places specified in the warrant, she said. Even though operators should cooperate, operators and their employees have rights. They all have the right to remain silent, and there’s no harm informing employees about this.
ICE agents frequently use hotels as staging points for actions, Bragiel said. Houston has been a hot spot for this type of activity, and it’s not uncommon to see outside of the downtown area a hotel with an open parking lot have ICE agents gather there.
“So, hotel [general managers] ask, what do I do? I see a bunch of ICE agents gathering in my hotel parking lot. What do we do? And the answer almost always is, nothing yet,” he said.
General managers in this situation should wait to see what’s next, he said. If the ICE agents are about to come in and serve a warrant, that’s an issue, but the general manager shouldn’t go out there and interfere with their operation.
“We don’t want to make ourselves a target, but it’s occurring,” he said. “We have this delicate balance we have to walk, and we need to be very careful when we see this occurring and think though the bigger picture.”
