Hotel Compliance in Colorado


Hotels in ski resorts have been a specific target of the U.S. Department of Labor: Wage and Hour Division in Colorado for the past three years.  On a national level, hotels have a high rate of investigation by the Wage and Hour Division and they are frequently found in violation of overtime law due to a variety of unique pay practices. In fact, according to the US DOL Data Enforcement website, hotels are the third most commonly investigated sector, only behind full service and limited service restaurants. Another reason for increased enforcement is that hotels employ a high percentage of what the WHD refers to as “vulnerable workers”. Federal labor enforcement agencies have been targeting industries that employ these workers because of their relative high risk of exploitation due to low pay and benefits, ignorance of rights under the law, and/or reluctance to exercise those rights.

A hotel is subject to the FLSA if its annual sales volume exceeds $500,000 per year. Even if it does less than $500,000, some of its individual employees may be covered if they engage in interstate commerce activities like swiping credit cards or ordering goods from out of state. The State of Colorado’s labor laws found in the state Wage Order apply to all private sector employers in four main categories including retail and service.

To stay out of trouble, remember these important nuggets of federal and state compliance information:

General Overtime: Overtime must be paid after 40 hours in a 7 day workweek regardless of the length of the pay period. State of Colorado labor law also requires overtime payment after 12 consecutive hours. Employees cannot waive their right to overtime pay. Overtime is an additional one half of an employee’s regular rate of pay calculated as follows: Total Pay / Total hours = regular rate.

Piece Rate Housekeepers: Housekeepers are often paid a piece rate instead of an hourly rate. For example, housekeepers are paid $4.00 per room and are expected to clean at least 2 rooms per hour.  This method of payment is legal but it doesn’t exempt these employees from minimum wage or overtime law.  Employers must pay these employees the additional one half of their regular rate of pay for all hours over 40 in a week. They must also check to make sure that employees have been paid at least the minimum wage for all of their hours. Employers must keep a record of hours worked for piece rate housekeepers just like they do for hourly rate employees.

Pre-shift working time for housekeepers: Housekeepers often gather cleaning supplies and attend morning meets prior to clocking in for the day.  That time is considered work time and must be paid. It’s important to have housekeepers clock in before performing any work related activities. Changing into a uniform upon arrival at work is usually not considered work time.

Automatic deductions for lunches: Be careful about automatically deducting a 30 minute lunch break from non-exempt employees’ time each day.  Hotel employees are often working on a tight schedule and may not be taking a full 30 minute break even though the full 30 minutes is being deducted. This can result in substantial overtime back wages.  Make sure that employees are taking their full 30 minutes or that they are clocking in and out for lunch on a time clock that doesn’t deduct for lunch breaks less than 30 minutes.

Bonuses and Commissions for Front Desk and Sales Employees: A common overtime violation occurs when employers fail to pay overtime on non-discretionary bonuses and commissions. Non-discretionary bonuses include attendance, safety, performance, and sales bonuses. The weekly amount of those bonuses must be included in the regular rate of pay that determines the overtime amount.

Uniform Deductions: Colorado labor law does not allow deductions from employees’ pay for the cost of uniforms.

Contracting with a temporary staffing agency:  Make sure that temp agencies pay their employees that work at your establishment in accordance with federal and state labor laws. The Wage and Hour Division will assert a joint employment relationship between a hotel and its staffing agency making both entities ultimately responsible for labor law compliance.

Misclassifying Employees as Salary Exempt: Hotels have a tendency to liberally apply salary exemptions. A salary exempt employee is someone who meets certain job duty requirements and is paid a weekly salary of at least $455 per week. Employers do not have to pay overtime to these employees. However, paying an employee a salary does not make them salaried exempt.  They must also meet the specific job duty requirements set forth in the federal regulations. For example, hotels often classify office workers as exempt under the Administrative category. To meet this exemption, employees must use independent judgment and discretion with respect to matters of significance. Bookkeepers, office assistants, front desk attendants, certain types of “coordinators”, data entry employees, and many others do not meet this job requirement and should not be classified as exempt from overtime.

It is a good idea to audit your hotel employment practices on a regular basis to make sure that you are complying with all state and federal labor laws. Contact us today to get started!

We hope you found this week’s tip helpful and informative. Please pass it along to any hotel employers or managers. Follow us on facebook to get a weekly tip update on your news feed!


–       By Kalen Fraser

The Labor Brain Inc. is not a law firm and its employees do not practice law or provide legal services.  The information provided on our website,  in email correspondence with representatives of The Labor Brain, and at outreach events is for informational and educational purposes only.  The information provided is not a substitute for the advice of an attorney.