MGM Springfield Pays $6.8 Million to Resolve Wage Breaches; Most Funds to Go to the State
MGM Springfield has come to an agreement to fork over more than $6.8 million for reparations and fines as a result of a multi-year investigation launched by the Massachusetts Attorney General's Office and its Fair Labor Division.
After welcoming guests to its $960 million resort in August 2018, the facility operated by MGM Resorts International was hit with a plethora of complaints in the following 18 months, which provoked the AG's office to initiate an inquiry. The conclusions of the investigation painted a damning picture, revealing that MGM Springfield had disregarded employee payment regulations, including not paying tipped workers the required hourly wage, skipping out on overtime pay, unlawfully keeping tips, failing to make prompt payments, and refusing to provide time off with pay to qualified staff.
AG Joy Campbell remarked: "MGM Springfield's failure to provide its employees, particularly hospitality workers, with their full wages and benefits made it harder for those workers to take care of themselves and their families." She added, "My office will not hesitate to enforce wage and hour laws."
MGM Springfield denied any wrongdoing in the settlement but pledged to cough up $6,839,287.36 in compensation and penalties. This sum will be dispensed to affected workers, whose claims were reportedly in the vicinity of $50 to $18K.
Distributing the Dough
The terms of the agreement stipulate that the affected workers must be made whole within a month from the settlement consent, which was inked on October 25. The backpay amounts to $461,587.36 and will be disbursed through direct deposits, minus the usual tax and insurance deductions, for employees still with the company. For former employees, checks will be mailed to them. The impacted personnel will be notified by MGM of the origins of their payments.
"We take our compliance obligations seriously and have made adjustments since 2019 to tackle this problem," claimed Dara Cohen, Spokesperson for MGM Resorts International. "We'll continue to pump resources into educational initiatives and regulary review our policies and procedures to ensure ongoing adherence."
Out of the total sum, $6,377,700 will be doled out to the commonwealth within one month of the signing of the consent decree as well. Some of the money will be used to cover the costs of an independent monitor appointed by the state to oversee MGM Springfield's wage and hourly compliance. Two annual audits will be carried out by an external firm, and their findings will be submitted to the AG's office.
A Widespread Predicament
According to Campbell's office, MGM Springfield's pay violations were not isolated to one specific segment of its operations. A whopping 2,036 workers, spanning a variety of roles such as table game dealers, casino floor attendants, banquet servers, bartenders, ushers, kitchen staff, housekeepers, and security, were among those affected.
The investigation revealed that wait staff members were enrolled in tip-pooling schemes by their upper management, hourly workers were paid less for overtime work, and security personnel were compelled to continue working during their meal breaks. Although tip-pooling is not strictly prohibited in Massachusetts, the state's rules demand that hourly staff members be the only ones permitted to share in the tips, excluding managers.
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Source: www.casino.org
