Labor department forces Tennessee hotels to pay fines, wages

Labor department forces Tennessee hotels to pay fines, wages

December 21st, 2011 by Joan Garrett McClane in News

The former Town and Country Inn on East 23rd Street is among 35 hotels in Tennessee being penalized by the U.S. Department of Labor for violating federal wage and hour laws.

Photo by Jenna Walker/Times Free Press.

A hotel that was the subject of a Chattanooga Times Free Press investigation earlier this year is among 35 hotels in Tennessee being penalized by the U.S. Department of Labor for violating federal wage and hour laws.

Labor officials said that, during a multiyear effort, which included an investigation into Chattanooga's former Town and Country Inn, they found widespread disregard for minimum wage, overtime and record-keeping provisions in the Fair Labor Standards Act.

In total, state hotels will be fined $14,552 and be forced to pay $173,045 in back wages to 283 employees.

Officials with the department would not say what the fines and back wages would amount to for Town and Country Inn on East 23rd Street. The owners of the property at the time, David and Steven Bernstein, live out of state and sold the property last year.

The building now has a "for lease" sign outside. Calls to the hotel, now called Extend A Suites, were not answered.

"The division is successfully identifying and remedying systematic labor violations in [the hotel] industry, so Tennessee's workers are protected against exploitation, and law-abiding hotel and motel employees are not placed at a competitive disadvantage for playing by the rules," Sandra Sanders, district director of the Wage and Hour Division's Nashville District Office, said in a statement.

Anita Burgess worked as a housekeeper at Town and Country in lieu of paying rent for 21/2 years and only received five paychecks after federal investigators flagged the hotel in the summer of 2010.

After leaving Town and Country, she has been living and working at Country Hearth Inn where she gets a paycheck, she said.

"It was a long, hard, tough fight," she said. "We know we won the case, but we don't know what we are getting back."

More than a dozen current and former employees at the Town and Country Inn told the Times Free Press in February that they had been invited to the extended-stay hotel when they were homeless. Their rooms were paid for a short time through a charity called Grace in Action, which operated on the property and was run by Tommy and Penny Peak.

The Peaks asked local churches to sponsor the rooms for $176 a week, while the advertised rate was $129. The Peaks said the extra money went for services for the homeless and food, but participants said they never received many of the services promised.

When church sponsorship of the rooms ran out, many of the motel residents were told they could work for their room or leave.

The problem with the arrangement, according to the Department of Labor, was that the work was worth more than the rooms. The residents also never were paid overtime, and some Town and Country Inn workers said they worked more than 40 hours a week or were on call all night.

Federal labor investigators started looking at Town and Country Inn in the summer of 2010 and, for a short time, David Bernstein started giving checks to employees. In November 2010, employees were told they would be laid off.

If employees who lived at the hotel still wanted to work for their rooms, they could sign a paper that would turn their jobs into volunteer positions with the hotel's new nonprofit foundation, the owners told residents.

Still, not everyone who said they were shortchanged by Town and Country is getting back pay in the enforcement effort.

Michael Belt, who lived and worked at Town and Country for 15 months without a paycheck, said he is part of a group of former residents who don't have enough records to prove they were wronged.

"I'm sure there are quite a few people who haven't gotten a penny from them," he said.

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