Audit Alert! Hospitality Industry

Professionals working in hospitality, including hotels and restaurants, are no strangers to Department of Labor (DOL) scrutiny. In 2012, then-Labor Secretary Solis announced that the DOL considered the industry to be a hotbed for wage-and-hour violations. In addition, the DOL enforces the H-2B visa program, a mandate that it is pushing to the forefront and that heavily impacts the hospitality industry. This initiative is fueled by recent decisions in which courts have announced they believe the H-2B visa program to be rife with abuse and illegal trafficking.

The last few weeks have brought speculation from numerous sources that the DOL is planning a renewed, concerted enforcement initiative targeting the hospitality industry for wage-and-hour violations.

Audits by the Department of Labor are fraught with risk. The audits can go back two or three years, depending on circumstances. Penalties can include hefty back-wage assessments for overtime and substantial penalties for visa violations. In addition, if there was a previous audit with violations in the recent past, you may face liquidated damages and civil money penalties.

If you are in the industry, you can prepare for the audit now to minimize or eliminate these substantial risks. MSEC offers internal audit services to identify and remedy liabilities. We can also represent you if you have been notified that you will be receiving a visit from an auditor. Last but not least, an audit now can help you to prepare for the imminent rule changes, which will impact hospitality as much or more than any other industry.