The Labor Laws for Hotel Resident Managers
A hotel resident manager is a font-line employee whose performance can make the difference in a hotel's success. Your business benefits from having a manger on-site that can respond immediately to situations or problems as they arise. It's possible to inadvertently violate federal and state labor laws if you do not properly account for all hours worked and benefits received by your manager.
The Fair Labor Standards Act sets the federal minimum wage and overtime pay laws. As of the date of publication, the federal minimum wage is $7.25 per hour and overtime pay is mandatory for all hours in excess of 40 hours in a work week. Federal overtime pay is calculated at the rate of one and one-half times an employee’s regular rate of pay. Unless a specific exemption applies under the law, an employee is presumed to be covered by these laws, including hotel resident managers. If a state's labor law gives employees greater benefits than federal labor law, employers in that state must follow state law. For example, as of the date of publication, the minimum wage in Arizona is $7.80 per hour and in California is $8.00 per hour. Also, California law requires overtime pay after eight hours are worked in one day, as well as after 40 hours in a work week.
Although it's lawful to compensate your resident manager with board and lodging in lieu of cash payments, this method of compensation must still comply with minimum wage and overtime pay laws. To avoid compliance problems, the amount you deduct from cash wages for board and lodging must be reasonable. Excessive deductions can cause your resident manager's hourly rate of pay to fall below minimum wage, and some states have specific related laws. In California, for example, a single-occupancy room can be deducted from wages at the rate of $37.63 per week and an apartment at the rate of $451.89 per month. California law also requires that a voluntary written agreement must be made between you and your resident manager for the deduction to be lawful.
The Fair Labor Standards Act contains certain exemptions to the minimum wage and overtime pay rules. The exemptions are based on an employee’s actual job duties and rate of pay, and are not dependent on an employee's job title, such as resident manager. An exemption that may apply to a hotel resident manager is the exemption for administrative employees. Three requirements must be met for this exemption to apply: the employee's compensation must be at least $455 per week, the employee's primary duty is office work related to managing business operations, and the employee's primary duty includes the exercise of discretion and independent judgment regarding significant matters. A careful evaluation of your resident manager’s job duties must be made before applying this exemption. If the exemption is applied improperly, you are liable for back pay and penalties.
If your resident manager is required to be on-call while on the premises, this is considered work time and must be compensated. Unless you can properly classify your resident manger as an exempt employee, you should specifically state the hours you expect your resident manager to be working. Although meal period of 30 minutes or more do not have to be paid, your resident manager must be completely relieved of duty during meal periods or this time must be compensated.