By Mike Nowatzki, Forum News Service
A Fargo-based hotel owner still denies any wrongdoing after paying more than $184,000 to settle a federal lawsuit claiming he cheated about 200 current and former workers out of wages at 15 hotels, including one in Alexandria.
U.S. Department of Labor investigators found that Bharat I. Patel violated the Fair Labor Standards Act by misclassifying some employees as salaried exempt and failing to pay overtime and at least the minimum wage to front-desk clerks, housekeeping staff and other hotel employees.
Without admitting to any of the allegations, Patel agreed to settle the lawsuit brought December 15 by the Labor Department and U.S. Attorney’s Office for North Dakota.
Patel agreed to pay $122,870.97 in back wages for the period from December 17, 2011, to June 16, 2014, and pay an additional $61,435.50 in damages directly to employees for the same time period.
In Alexandria, the judgment will benefit workers at the Country Inn and Suites.
Back wages will also be paid to employees who worked at 13 North Dakota hotels in Fargo, Jamestown, Dickinson and Wahpeton, as well as one hotel in Glendive, Montana.
A consent judgment was entered July 10 in U.S. District Court in Fargo. The Labor Department acknowledged receiving the payments from Patel on Tuesday.
“Restoring these earned wages will make a meaningful difference in the quality of life for these workers and their families. All employees deserve fair compensation for hard work,” Betty Campbell, the department’s acting regional administrator in Denver, said in the news release.
Patel’s Fargo attorney, Michelle Donarski, said in an emailed statement that Patel believed that all employees were compensated for all hours worked, including overtime. She said he relied on hotel managers and employees to accurately track and report hours worked, and on a payroll company hire by Patel to accurately calculate and pay overtime.
“The consent judgment is not an admission of any wrongdoing and my client adamantly denies any intentional failure to pay its employees,” she said.
The department said Patel violated the Labor Standards Act by paying hourly employees straight-time pay for hours worked over 40 in a workweek, failing to pay the legally required time-and-a-half for overtime and not combining hours for employees who worked at two locations in the same workweek.
Some employees weren’t paid the minimum wage of $7.25 for all hours worked and weren’t paid overtime because Patel misclassified them as exempt salaried employees, the department said. The company also failed to keep accurate records of all hours worked and pay rates.
Donarski said there “was never an intent to not pay employees for all hours worked.”
“As soon as Mr. Patel received notice from the DOL, he promptly agreed to pay any wages due,” she said. “Mr. Patel openly worked with the DOL on this matter and is taking steps to educate his managers and employees. It is unfortunate that the DOL is using Mr. Patel to send a message to employers.”
In addition to the back pay and damages, Patel agreed to train managers on federal wage requirements and provide workers with information on wage laws and contact information for the Labor Department’s Wage and Hour Division for at least four years.