Labor Laws in Hospitality: What Hotels Need to Know

We just wrapped up another webinar!

Our former VP of Hospitality, Connie Rheams sat down with David Sherwyn, Professor, Lawyer, and Academic Director of the Center for Innovative Hospitality Labor & Employment Relations at Cornell University’s School of Hotel Administration and Paul Wagner, adjunct professor and attorney specializing in labor and employment law to discuss how hotel technology relates to labor laws in hospitality.

With a topic as complex as labor law, we wanted to really do a deep dive into the subject and consult esteemed subject matter experts on what hotels really need to know about employment and labor laws that could be affecting how they run their business and use technology with their employees.

Here are the top takeaways from our webinar, Labor & Employment Laws: What Hotels Need to Know.

Legislation Will Always Trail Behind Technology

Simply put, technology moves fast — it’s constantly evolving, changing, and optimizing. Laws move slow. Since these two fundamental elements of modern society move at such drastically different paces, they are often out of sync with each other.

“We try to apply these laws to new technology, and it creates anomalous results more often than we’d like.”
David Sherwyn

Fun fact: The Railway Labor Act actually regulates the airline industry to this very day because airplanes weren’t invented when the law was created!

What Are Some of the Legal Risks Hotels Face When Implementing New Technology?

Hospitality can be a particularly risk averse industry. Sometimes, hotel managers may be hesitant to adopt new technology because they’re concerned it might have unintended consequences later on down the road. Hotel leaders recognize the value of technology, but sometimes they are hesitant to implement it because of legislation, since the legislation hasn’t yet caught up with technology.

Some of the potential risks include. . .

Wage and hour liability: This happens when hourly employees use work-related technology outside of scheduled work hours (could also be about reading a memo, getting a call from a supervisor etc.)
Increased levels of communication could create more opportunities for a hostile work environment (e.g., sexual harassment and bullying)

Hotels can potentially be penalized even if they didn’t know that they weren’t compliant. The onus of ensuring compliance is 100% the hotel’s responsibility.

How Can Hotels Use Technology to Comply with the Wage and Hour Law?

There’s a reason lawyers get paid so much. The law is confusing, complicated, and sometimes utterly baffling. There are over 2,000 different labor and employment regulations just in California.

How is a hotel business supposed to make sure they’re compliant, if it’s impossible to keep track of the rules, especially when they operate across different jurisdictions?

Here’s what our experts recommend. . .

Cross-Functional Alignment

Hotels need better alignment between operations, IT, and compliance departments. Paul Wagner pointed out that oftentimes these departments are too siloed (particularly for hotel companies with multiple properties).

These departments should be working cross-functionally to ensure success. Each department has a different area of expertise that is needed to ensure compliance. Operations knows what they need to be successful, while compliance can help them mitigate the risks, and IT can help implement the technology needed to make everything come together.

Record and Pay for Time Worked

Capturing time that hourly employees spend on work-related tasks outside of their scheduled shifts can actually be to the benefit of the employer. When a company has those eager, proactive employees who volunteer to do something outside of work on their own, we can track that time more efficiently with internal communication platforms like Beekeeper.

“Technology is the solution, but management has to be aware of it and capturing that time as efficiently and as broadly as possible.”
Paul Wagner

One of the major benefits of having an employee app in place, is that it provides a verified record of how much an employee actually worked when they were off the clock. If an employee claims they worked for five hours outside of their scheduled shift, but according to the app they only sent two messages, then the employer has concrete proof to refute the exaggerated claim and protect themselves.

Counsel Employees Who Are Communicating Outside of Work Hours

Every employer wants team members who are eager, proactive, and take initiative. Paul Wagner recommends that one way employers can protect themselves against labor liability is to counsel employees who are spending time on work-related tasks outside of their scheduled work hours.

For these employees, companies can either request that they avoid working while off the clock. Or, an even better solution would be to build that extra time into the employee’s work schedule. Add an extra half hour on to the end of their shift to give them that prep time they need to be more successful out on the floor.

Have Employees Accept Employee App Policy / Fairplay Rules

It’s important that the employer puts in place an employee app policy that reinforces how the technology should be used to be compliant.

Employees should know and understand that they should only use employer-provided communication technology only during working hours and if this is not respected, then they will be paid for the time worked outside of working hours and may be disciplined. Ideally, this commitment would be renewed periodically and employees agree to the benefits they receive from using this technology.

Utilize “Smart” Clock In/Clock Out Tech

Technology does not just create liability when it comes to labor laws, it can also help companies be compliant.

Many hotels are leveraging smart clock in/clock out tech to ensure employees are taking their full, 30-minute break.

Essentially, these new smart clock in systems will not let the employee clock back in from their break if the break is under 30 minutes. This way, companies can automatically protect themselves from claims that employees weren’t given their full, allotted break time.

Don’t Forget About California

California poses a unique challenge to wage and hour laws because it is the only state that does not recognize something called “de minimis time” — a concept which essentially means that if an employee spends a few minutes here and there on a work-related task while off the clock, they are typically not compensated since it’s a negligible amount of time.

California, however, does not recognize this concept, so employers need a different approach. Paul Wagner suggests that rather than carving out California, companies should create a standard around wage and hour laws that complies with the strictest regulations (which is California) and use that across their entire company.

“All you need to do is to have an objectively accurate system for capturing compensable time for hourly employees who are using this technology to communicate about stuff that’s primarily for the benefit of the employer outside of their normal, punch clock work hours. That’s all it takes.”
– Paul Wagner

What About Sexual Harassment and Bullying?

Opening up the lines of communication to every employee at every level of organization may give some managers pause because they’re worried about certain employees abusing their new found access to other team members.

In reality, having a transparent, open communication platform like Beekeeper can actually protect companies in the long run. If employees are saying or doing anything inappropriate, the company has a written record of exactly what was said.

The last thing managers want is to get into a he said/she said scenario with regard to sexual harassment or bullying. If employees are using a company-provided app to perpetrate abuse, then employers can step in immediately and prevent further harassment.

“When you have technology that allows you to see what happened — you can see the communication go back and forth — now you can jump in and do the right thing, that’s a net positive.”
– David Sherwyn

At the same time, having the capacity to go viral, exposes the company to the risk of creating a hostile environment.

Here is some advice on how to mitigate this risk.

Create a Digital Communication Policy and Have Employees Sign Off On It

As Paul Wagner said, “I bet every person who works at a hotel in this webinar in HR has a social media policy in place.”

He suggested that companies should adopt a similar policy as it pertains to their employee app to establish rules of engagement.

Which leads us to our new tip. . .

Implement a Monitoring System for User Generated Content

If for some reason an employee does post something inappropriate in the team app, admins can immediately become aware and take action. Employers have a legal obligation to monitor communication within an employer-provided communication tool.

Empower Managers to Immediately Report Any Inappropriate Content

Alignment between a hotel’s managers and the corporate office is a must. Managers should be trained to notify HR right away should anyone violate the fairplay rules or internal communication policy.

What If I Use WhatsApp?

The same legal liabilities apply to any tool used for work purposes and where managers communicate with their employees. Consumer chat apps are not ideal for workplace communication for several other reasons.

You can’t track usage
When someone leaves the company, they still have access to confidential information
They are not nearly as secure as an employee app that was built for business communication
Employees may be communicating trade secrets
Employers have no control (and also almost no recourse) over negative sentiments expressed through platforms like WhatsApp, or Facebook groups

The National Labor Relations Board strongly argues that trying to curtail your employees’ activities on social media interferes with their rights. So, if an employee goes on a public social media site and complains about their pay, their boss, or the company, there’s nothing an employer can do to stop them.

Essentially, if an employee posts a negative statement about a manager in a Facebook group, the company cannot control or moderate that content. But if negative statements are posted within an employer-provided app like Beekeeper, and they violate the Fairplay rules the employee has already agreed to, or the company’s official internal communication policy, then they can take action.

“I think that allowing social media is very problematic if you’re trying to keep a trade secret and it’s out on social media it’s not a trade secret anymore so I would not want my employees communicating anything close to a trade secret on social media.”
– David Sherwyn

What About Unions?

Some hoteliers are under the assumption that if they provide their employees with an open forum to connect and communicate, then they will start to unionize. Neither of our experts saw this as a big concern.

This is not a new concern specific to employee apps. It actually goes all the way back to when email first came out.

Technology is always going to lead to greater transparency and more knowledge. The key is treating our employees right, being great leaders of men and women, and most importantly, communicating and responding to the concerns of our employees.
– Paul Wagner

If Beekeeper allows employers to see employees talking about what their concerns and grievances are, they can then address those concerns immediately by reinforcing policies or resources available to remedy the situation before employees start thinking about unionizing.

Essentially, an employee app allows employers to rectify complaints more efficiently and resolve problems in-house rather than having their employees get fed up and go to the unions for help.

“You’ve got something in Beekeeper that lays out the issues. Now you’ve got all this information and insight. I don’t see it as a downside. I see it as a pure upside.”
– David Sherwyn

Hotels Should Embrace Technology, Not Run From It

Both of our experts agree that employer-provided communication tools like Beekeeper help create a more transparent, open, and honest workplace.

Instead of shying away from problems and potential labor issues, tools like Beekeeper can actually help employers get out in front of these issues before they snowball into larger problems.

You can’t let the tail wag the dog. You can’t let the fear of labor and employment violations prevent you from engaging with where progress is going — and that’s technology.
– David Sherwyn.

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