Hotel Firms Fined $210K, 'Shortchanged' Workers: Dept. Of Labor

EAST HAMPTON, NY — Two Hamptons hotel management companies were ordered to pay $210,000 in penalties after H-2B guest worker program violations, the U.S. Department of Labor said.

Dune Resorts LLC and Ocean Bay Management Inc. violated several requirements of the H-2B Visa program, resulting in direct job losses to 39 United States workers and underpayments to 59 H-2B employees, the DOL said.

Dune Resorts, located in East Hampton, manages "the finest" hotels in East Hampton, Montauk and Amagansett, according to the company's website; Ocean Bay Management, also located in East Hampton, features properties in Montauk, Amagansett and Greenport.

According to the DOL, the H-2B guest worker program permits employers to temporarily hire nonimmigrants to perform nonagricultural labor or services in the United States. The employment must be of a temporary nature for a limited period of time, the DOL said.

The H-2B program requires the employer to attest to the Department of Labor that it will offer a wage that equals or exceeds the highest of the prevailing wage, applicable federal minimum wage, the state minimum wage, or local minimum wage to the worker, the DOL said.

As the result of an investigation by the DOL's wage and hour division, Dune Resorts and Ocean Bay Management will pay $210,000 in back wages and civil money penalties and agree to enhanced compliance terms to resolve current violations and deter future violations, the DOL said.

Dune Resorts is also barred from participating in the H-2B Visa program for two years.

Dune Resorts and Ocean Bay Management did not immediately return requests for comment.

Dune Resorts neglected to contact U.S. workers from the prior season to solicit them to return to work and omitted critical benefits from required job recruitment ads, in violation of program requirements, the DOL said. Those violations led to a "sharp drop" in the overall number of U.S. workers employed by Dune Resorts — investigators identified 38 former U.S. workers who lost their jobs, the DOL said.

The investigation also found that both Dune Resorts and Ocean Bay Management required H-2B workers to work outside their approved job classifications and perform work that should have been paid at a higher rate of pay; failed to pay H-2B workers for subsistence costs while traveling to and from their home country; and failed to disclose the deduction of housing costs from wages to H-2B workers in advance, the DOL said.

Ocean Bay Management also paid H-2B housekeepers less than the offered wage rate, the DOL said.

Under a settlement approved by the department’s Office of Administrative Law Judges, Dune Resorts will pay $121,567 in back wages to employees and $32,454 in civil money penalties to the U.S. Department of Labor; Ocean Bay Management will pay $23,523 in back wages and $32,454 in penalties, the DOH said.

They will also hire a third-party contractor to assist them in complying with the H-2B regulations, including training for owners and managers, the DOH said.

“The failure by these employers to follow the rules short-changed both U.S. and guest workers, denying job opportunities for the former and proper compensation for the latter,” said Wage and Hour Division District Director David An in Westbury. “Such violations are preventable."

“Employers who flout the rules of the H-2B program not only harm workers, they also gain an unfair economic advantage over law-abiding employers," said Regional Solicitor of Labor Jeffrey Rogoff.