The Broadmoor hotel in Colorado Springs was recently accused of allegedly violating wage and hour law for the second time. The claimant, a banquet server who worked at The Broadmoor for six years, contended that the hotel did not pay overtime or let servers keep gratuity.
The hotel claimed that the lack of gratuity and overtime pay was due to their categorization of servers as part of the sales staff, who are paid by commission—and thus, not eligible for this type of pay.
What was the ruling?
In the first hearing, which took place in September of 2019, the Colorado Division of Labor and Statistics ruled that the server was owed both tips and overtime pay.
However, The Broadmoor appealed this decision and successfully overturned the verdict on the tipped wages owed. The division upheld to the original decision regarding overtime pay. As a result, The Broadmoor was forced to pay the claimant a portion of lost overtime wages as well as penalties and a fine to the division.
In February of 2020, the claimant appealed the second ruling that The Broadmoor had already paid the tipped minimum wage. They also asked for decisions on several other alleged wage and hour violations on the part of The Broadmoor. The division refused to consider the ruling, which means the claimant would have to file a lawsuit at this point in order to pursue the issue. Previously, the wage and hour violations discussed went before the Division of Labor and Statistics—not a judge.
Is further litigation likely?
While the claimant has the option to file a lawsuit, the likelihood of success is questionable. The Broadmoor has its employees sign a waver to take disputes to arbitration. This is what put an end to the first wage and hour claim against the hotel.
What are the wider implications?
Wage and hour matters are complex, with many factors in play. The waiver the hotel uses presents a significant barrier to litigation. They may escape further litigation because of it, but the hotel still had to pay a significant amount in damages, penalties and fines from the Colorado Division of Labor and Statistics. The division’s rulings follow a national trend favoring the employee over the employer in wage and hour actions.