Wage and Hour Division (WHD)

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SAN JUAN, Puerto Rico -- The U.S. Court of Appeals for the First Circuit has affirmed a lower court ruling ordering the owner of a hotel in San German, Puerto Rico, to pay 282 current and former employees a total of $282,541 in back wages and liquidated damages to resolve a lawsuit filed by the U.S. Department of Labor alleging violations of the Fair Labor Standards Act (FLSA). The ruling was signed in San Juan.

The court order covers hotel cooks, housekeepers, front desk employees, and wait and maintenance staff.

“At trial, the Labor Department’s attorney demonstrated that the employer’s violations were willful. In part, that’s why we won liquidated damages equal to the amount of the back wages due,” said David R. Heffelfinger, director of the department’s Wage and Hour Division’s Caribbean District Office in Guaynabo, Puerto Rico.

In June 2005, Hotel Oasis Inc., doing business as Parador Oasis, and owner Lionel Lugo-Rodriquez were ordered by a U.S. district judge to pay a total of $141,270 in minimum wage and overtime back wages, plus an equal amount in liquidated damages. The court order also prohibited the defendants from future violations of the minimum wage, overtime and recordkeeping provisions of the FLSA.

The law requires that employees be paid at least the applicable federal minimum wage and time and one-half their regular rates of pay for hours worked more than 40 in a workweek. Employers must also maintain accurate records of employees’ wages, hours and other conditions of employment.

The defendants appealed the order to the Court of Appeals alleging error in the lower court’s failure to set aside a stipulation entered prior to trial that conceded the company was covered by the FLSA, its conclusion that Lugo-Rodriquez was personally liable as an employer and its discretionary decision to award liquidated damages.

The Court of Appeals ruled against the defendants in the case, which began in 1994, that eventually resulted in the June 2005 judgment. The Labor Department initially filed a complaint in federal court alleging that Oasis was paying employees less than the minimum wage, not paying for training time or meetings held during nonworking hours, paying cash “off the books” and not paying appropriately for overtime. The suit also alleged that the company maintained two sets of books covering the same employees.

The Labor Department’s Wage and Hour Division office in Ponce, Puerto Rico, investigated this case, and the original suit was filed by the department’s Regional Solicitor’s Office in New York City. The Court of Appeals case was handled by the department’s Regional Solicitor’s Office in Washington. For more information about the FLSA, call the Department of Labor’s toll-free helpline at (866) 4US-WAGE (487-9243) or contact the division’s office in Guaynabo at (787) 775-1947. Information is also available on the Internet at www.wagehour.dol.gov.

(Chao v. Hotel Oasis, et al; No. 06-1021)

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