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Feds sue over unpaid wages for hotel workers

April 18, 2014

The U.S. Department of Labor filed two lawsuits in the federal district court in Columbus seeking back wages and an equal amount in liquidated damages for 89 workers at five Columbus, Ohio-area hotels.

One lawsuit addresses violations of the Fair Labor Standards Act’s minimum wage and overtime provisions for the hotel staff directly working for Hilliard, Ohio-based Darpan Management, and the other addresses similar violations for workers jointly employed by Fantastic Cleaning Ltd., a company that provided hotel staff to Darpan Management.

The lawsuits were filed against Darpan Management Inc.; five hotels the company owns and manages; and its owners, Darshan Shah, Vibhakar Shah and Prakash Patel.

Investigators from the division’s Columbus District Office found violations of the FLSA’s minimum wage, overtime and record keeping provisions for 61 workers jointly employed by Darpan Management and Fantastic Cleaning. According to the Department of Labor, Fantastic Cleaning — which provided housekeepers, attendants and laundry staff for the hotels owned and operated by Darpan Management — classified the housekeepers as independent contractors instead of employees. These employees were paid by the room and frequently did not earn enough to make the federal minimum wage of $7.25 per hour, according to the Department of Labor, and were also were not paid legally required overtime when they worked beyond 40 hours in a workweek.

Investigators determined that a total of $42,288 in back wages is owed to the 61 workers jointly employed by Darpan Management and Fantastic Cleaning.

A second investigation found that 28 workers directly employed by Darpan Management as hotel staff are due $11,181 in unpaid minimum wage and overtime. According to the Department of Labor, the company failed to pay some workers for training time, resulting in minimum wage violations, and only paid workers overtime after they had worked over 80 hours in a two-week period as opposed to after 40 hours in a work week required by law. Other allegations by Department of Labor include: hours worked were not computed accurately by the employer, resulting in uncompensated overtime; some employees were wrongly classified as exempt from overtime; and Darpan Management failed to maintain accurate and complete payroll records.

“Darpan Management failed to meet minimum legal wage standards for housekeeping and other staff in these hotels. This practice, as well as failing to pay overtime and maintain accurate records, resulted in a substantial loss of income for these employees,” said George Victory, the Wage and Hour Division’s district director in Columbus. “Housekeepers were misclassified as independent contractors and paid by the room. In many cases, they did not even earn the minimum wage. These lawsuits should remind employers that the Labor Department is committed to ensuring that workers receive pay to which they are legally entitled.”

The hotels where the violations occurred, all operated by Darpan Management, include the Baymont Inn & Suites, the Country Inns & Suites and two Four Points by Sheraton in Columbus, Ohio, and the Holiday Inn Express & Suites in Reynoldsburg, Ohio.