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Hotel firm to pay $47,000 for IC misclassification

August 16 2013

Midwest Lodging, a Cincinnati-based hotel operator, agreed to pay $47,654 in back wages to 67 workers from staffing firms that were misclassified as independent contractors, the U.S. Department of Labor announced.

Midwest Lodging used Luxor Services Inc., Bahor Inc. and BA Cobalt Cleaning Inc., according to the Department of Labor. And the affected workers were jointly employed by Midwest Lodging and the temporary staffing agencies.

In addition, the Department of Labor reported Midwest failed to pay overtime to workers directly employed by the company.

“Temporary employment agencies serve valuable and legitimate business needs in today’s economy, but employers may not use such services to escape their responsibility to pay their workers the minimum wage and overtime pay they are entitled to under the law,” said George Victory, the division’s district director in Columbus, Ohio.

Midwest signed an enhanced compliance agreement which includes paying back wages to the employees of the staffing agencies that have ceased operation, creating an employee handbook which details wage specific information, maintaining accurate payroll records, issuing payroll checks with detailed wage statements and ensuring that any workers supplied by a contracting agency are paid in accordance with the Fair Labor Standards Act.

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