Aspen hospitality industry pays more than $500,000 after federal wage probe
by Chad Abraham
, Aspen Daily News Staff Writer
Tuesday, February 25, 2014
The Aspen Skiing Co. and numerous other businesses in the local hospitality industry have paid more than $500,000 to settle federal violations related to minimum wage and overtime compensation, according to the U.S. Department of Labor (DOL).
The SkiCo was fined $108,796 for wage violations that affected 300 employees, company spokesman Jeff Hanle confirmed Monday. The payments followed a year-long investigation by the DOL.
“We accept responsibility, and we are pleased this issue is resolved and the payments are now in the hands of our employees,” Hanle wrote in an emailed statement. “We are, however, shocked and surprised that the DOL chose to single out and only identify the Aspen Skiing Co. among the 45 different companies in the area that were part of the audit.”
The DOL contacted 45 local service industry businesses in 2013, according to a press release issued Monday. As a result, $500,000 in back wages has been paid to more than 1,000 workers, the release says.
The investigation targeted businesses such as hotels and restaurants that “employ many low-wage workers,” the release says.
“The department has historically found significant labor violations in such establishments,” the release says.
Hanle defended the infractions as being small relative to SkiCo’s size and complexity as an organization.
“While [SkiCo] is the largest employer in the area, our fines accounted for approximately 10 percent of the total fines generated by the investigations,” according to his statement.
Hanle clarified that, according to his information from the labor department, total back wages and penalties paid by local businesses was closer to $1.2 million. The $500,000 figure is limited to back-wage payments and excluded penalties, he said. SkiCo’s $108,796 mark includes both.
The names of the other local businesses cited and they amount they paid in fines wasn’t available Monday evening.
Rob Ittner, the Pitkin County commissioner who owns Rustique Bistro, said he paid $1,700 following the investigation. He said he chose not to contest the accusations and pay the relatively small amount, and that his restaurant complies with overtime rules.
Labor department investigators were in Aspen in February 2013, the Aspen Daily News reported in March. Dozens of restaurants and bars were contacted during the roughly two-week probe by Front Range investigators.
Officials from the labor department’s division of hours and wages contacted the businesses, asking to review employment and payroll records. Investigators also interviewed some businesses’ employees.
They were looking for potential violations related to overtime pay, record keeping and hourly wages. One restaurateur said investigators asked for payroll records to check overtime pay.
Hanle said a DOL audit revealed that the calculations the company used for overtime pay were out of federal compliance. The financial numbers were calculated using long-established payroll software from People Soft and concerned “a number of employees paid on a commission or tipped basis ...,” Hanle said.
“The total payments by ASC were less than 0.001 percent of total payroll, and average checks to employees and former employees were less than $350 over a two-year audit period,” the SkiCo statement says.
During the audit period, overtime was being calculated and paid to employees but not exactly as prescribed by the DOL, Hanle said.
The SkiCo “worked cooperatively with the DOL and recalculated overtime pay and issued checks to the affected employees and former employees,” he said. “Overtime calculations have been corrected for future payrolls. Additional payments were made to employees as reimbursement for uniform expenses and for back wages to a few employees reclassified as eligible for overtime by DOL.”
Cynthia Watson, southwest regional administrator for the labor department’s wage and hour division, said in a press release that the agency is “pleased that Aspen Skiing Co. workers will be paid all that is owed them for their hard work, and the company’s customers will know they are doing business with an employer that is committed to treating its workers fairly.”
Hanle said DOL representatives thanked the SkiCo for cooperating and “told us that this audit turned up a ‘surprisingly small amount’ of back wages and fines given our company’s size and complexity.”
“It is our strong desire and commitment to pay our employees properly,” he said.