A Las Vegas limousine company will be required to pay $232,317 to 479 employees for violating the federal Fair Labor Standards Act and paying workers less than minimum wage.
The Las Vegas office of the Labor Department’s Wage and Hour Division found that Executive Las Vegas had made improper payroll deductions and applied an incorrect formula to determine whether employees received enough in tips to support the credit the company claimed against its obligation to pay minimum wage.
Executive Las Vegas is part of Jacob Transportation Services with authority to offer charter limousine and airport transfer services. It has a fleet of 210 minibuses, corporate vans, stretch limousines, sports utility vehicles and luxury Jaguar, Mercedes-Benz and Rolls-Royce sedans.
The company is a contracted limousine operator for Wynn Las Vegas, The Venetian and the MGM Grand in Las Vegas.
Labor Department regulators determined that the limousine and shuttle bus company had made payroll deductions for vehicle repairs, uniforms, drug tests, fuel, name badges, cash shortages and water cups. That resulted in commission-based drivers falling below the minimum wage of $7.25 an hour.
Las Vegas attorney James Jimmerson, a managing member of the company, said “less-than-candid former employees” provided inaccurate information on tips. He said the company fully cooperated with the Labor Department investigation.
“Executive Las Vegas is a home-grown, family owned and highly reputable employer whose valued staff provides luxury and timely chauffeur transportation for its customers and guests,” Jimmerson said.
“Our team of employees easily earn much more than minimum wage plus substantial tips and benefits,” he said. “Each pay period, each of our employees acknowledge in writing that they’ve earned at least a minimum wage. Unfortunately, many former employees were less than candid in underreporting their tips and daily or weekly incomes.
“Nonetheless, Executive has worked hand-in-hand to quickly and appropriately resolve this matter,”Jimmerson said.
Gaspar Montanez, district director for the Wage and Hour Division of the Labor Department in Las Vegas, said the investigation involving Executive Las Vegas lasted about six months and included interviews with executives, employees and former employees of the company. The department also examined payroll records from over the past three years.
Montanez said a statute of limitations prohibits the department from reviewing records more than three years old, but that the violations could have occurred over a longer period.
The decision to require the company to pay the more than $230,000 to employees was an effort to compensate them for what they were due. The department could have levied an additional fine on the company, and Montanez said that may occur if there are further violations.
The Fair Labor Standards Act requires that covered employers pay nonexempt employees at least the federal minimum wage of $7.25 for all hours worked and time and a half of the regular rate after a 40-hour work week. Taxi and limousine drivers are exempt from a state minimum wage of $8.25.
Under the law, tips are the property of the employee who receives them, but employers can benefit by claiming a credit based on what they pay toward minimum wage. If an employee’s tips combined with the employer’s direct wages do not equal the minimum wage, the employer must make up the difference during the pay period.
An employer that claims a tip credit is required to pay a tipped employee at least $2.13 an hour in direct wages, provided that amount plus the tips received equals at least $7.25 an hour.
Contact reporter Richard N. Velotta at firstname.lastname@example.org or 702-477-3893. Find him on Twitter: @RickVelotta.