Alphabetical by case name. Each entry gives the citation, the holding in plain terms, and the practical consequence for hotel operators. These digests simplify; the opinions control — read them before relying on them.
Interpretive framework & deference#
Read this group first — it is the lens for every entry below. Wage-and-hour disputes turn not only on what the statute says but on who gets to say what it means. After the Supreme Court ended Chevron deference, an agency's reading of the FLSA no longer binds a court; a DOL fact sheet or opinion letter now persuades only to the extent it is well-reasoned (the Skidmore standard), and exemptions get a "fair reading" rather than the old narrow-construction thumb on the scale. That shift is why the opinion-letter trilogy and fact-sheet shelf are guidance to weigh, not law to obey — and why a hotel's good-faith reliance on them is a defense, not a guarantee.
Loper Bright Enterprises v. Raimondo#
603 U.S. 369 (2024) (U.S. Supreme Court 2024)
Overruled Chevron: courts, not agencies, independently decide what an ambiguous statute means, giving an agency's interpretation respect only to the extent it is persuasive.
Why hotels care: Courts independently interpret the FLSA; valid regulations issued within delegated authority remain operative. Opinion letters and fact sheets can persuade, and qualifying actual reliance may support statutory defenses. Loper Bright did not invalidate DOL regulations wholesale.
Skidmore v. Swift & Co.#
323 U.S. 134 (1944) (U.S. Supreme Court 1944)
An agency interpretation that lacks the force of law is entitled to judicial respect proportional to its thoroughness, the validity of its reasoning, and its consistency over time.
Why hotels care: After Loper Bright, the thoroughness, reasoning, consistency, and other persuasive qualities of DOL guidance matter to its interpretive weight. A statutory good-faith reliance defense is a separate inquiry with its own requirements; persuasive weight alone does not decide that defense.
Tips, pools & service charges#
The hospitality core. These decisions trace a single arc — from who may keep a tip (the manager/supervisor exclusion and the pre-2018 retention split), through when a mandatory charge is really a gratuity owed to staff (the state service-charge cases that decide who owns the 20%-plus banquet charge), to who the government can bill for the payroll tax on tips that were never reported. For a full-service hotel running tip pools, banquet service charges, and a spa, every link in that chain is a live exposure. See tip pooling and service charges.
Barenboim v. Starbucks Corp.#
21 N.Y.3d 460 (2013) (N.Y. Court of Appeals 2013)
Under NY Labor Law §196-d, an employee whose principal or regular duty is personal service to patrons may share in tips despite limited supervisory duties. An employee with meaningful authority or control over subordinates is ineligible; that authority need not include final hiring or firing power.
Why hotels care: New York's test for banquet captains, lead bartenders, and bell captains in tip pools differs from the federal duties-based manager test — analyze both before building the pool roster.
Cumbie v. Woody Woo, Inc.#
596 F.3d 577 (9th Cir. 2010) (9th Cir. 2010)
Where no tip credit is taken, the FLSA (as then written) did not restrict the composition of a mandatory tip pool, permitting back-of-house participation.
Why hotels care: The doctrinal seed of today's rule: no-tip-credit employers may run kitchen-inclusive pools under current federal law, with the employer/manager/supervisor retention ban and any more protective state restrictions still applying.
Marlow v. New Food Guy, Inc.#
861 F.3d 1157 (10th Cir. 2017) (10th Cir. 2017)
Under the pre-2018 FLSA, held that an employer paying the full federal minimum wage without a tip credit could retain tips — contrary to Oregon Restaurant & Lodging. Congress subsequently prohibited employer retention of employee tips regardless of whether a tip credit is taken. The decision is not a current authorization to retain tips, and compulsory service charges raise a separate legal inquiry.
Why hotels care: The circuit split that prompted Congress to amend FLSA section 3(m) in 2018, banning employers, managers, and supervisors from keeping tips regardless of whether a credit is taken.
Marsh v. J. Alexander's LLC#
905 F.3d 610 (9th Cir. 2018) (en banc) (9th Cir. (en banc) 2018)
Deferred to DOL's then-existing 80/20 dual-jobs guidance, allowing servers' claims for untipped side-work time to proceed.
Why hotels care: Historical context for the side-work wars — and a reminder that vacatur of the 2021 rule did not erase the case law plaintiffs cite when pleading legacy theories.
Matamoros v. Starbucks Corp.#
699 F.3d 129 (1st Cir. 2012) (1st Cir. 2012)
Applying the Massachusetts Tips Act as then written, excluded shift supervisors with managerial responsibilities from the pool and upheld mandatory treble damages. The current statute defines an eligible wait-staff employee by the absence of managerial responsibility during the day the employee serves patrons; its separate service-employee definition contains an unqualified no-managerial-responsibility condition.
Why hotels care: Massachusetts pool eligibility must be checked under the current statutory category and, for wait staff, the employee’s serving day. Neither a job title nor the federal manager test substitutes for that analysis.
Montano v. Montrose Restaurant Associates#
800 F.3d 186 (5th Cir. 2015) (5th Cir. 2015)
Reversed summary judgment for the restaurant because the evidence created a factual dispute over the coffeeman’s eligibility for its mandatory tip pool. The court required a case-specific inquiry into customer-service duties and the extent of customer interaction; it did not finally decide eligibility.
Why hotels care: Vet the actual activities of borderline hotel roles. Montano treats customer interaction as important to the customary-tip inquiry; receiving tips directly from guests is not required. DOL letter FLSA-2025-03 applies a related factual analysis.
Mothering Justice v. Attorney General#
Mich. July 31, 2024 (Mich. Supreme Court 2024)
The legislature's 2018 "adopt-and-amend" maneuver was unconstitutional, reviving the original minimum-wage initiative including its tip-credit phase-out — before February 2025 legislation enacted a compromise preserving a 50% tipped wage by 2031.
Why hotels care: Michigan hotels lived through a near-elimination of the tip credit; the surviving compromise schedule (40% in 2026, 50% by 2031) is now a fixed planning input.
O'Grady v. Merchant Exchange Productions, Inc.#
41 Cal.App.5th 771 (2019) (Cal. Ct. App. 2019)
A mandatory banquet service charge can constitute a "gratuity" belonging to employees under Labor Code §351, depending on how it is presented to customers.
Why hotels care: California joined the service-charge battleground: ambiguous banquet-charge labeling invites class claims that the house kept the workers' money.
Oregon Restaurant & Lodging Ass'n v. Perez#
816 F.3d 1080 (9th Cir. 2016) (9th Cir. 2016)
Upheld the DOL’s 2011 rule restricting tip pools to customarily tipped employees even when the employer took no tip credit. That historical restriction on kitchen-inclusive pools was displaced by the 2018 legislation and the current federal regulations.
Why hotels care: Half of the pre-2018 circuit split (with Marlow) that Congress resolved by the 2018 FLSA amendment. Today, federal law permits a qualifying no-credit kitchen-inclusive pool, prohibits employer/manager/supervisor retention, and leaves more protective state restrictions intact.
Restaurant Law Center v. U.S. Department of Labor#
120 F.4th 163 (5th Cir. 2024) (superseding opinion, Oct. 29, 2024)
Vacated the DOL's 2021 "80/20/30" dual-jobs rule nationwide as contrary to the FLSA's text and arbitrary and capricious — ending the federal requirement to track tipped employees' side work in 20-percent and 30-minute increments.
Why hotels care: The federal 2021 percentage-and-duration rule was vacated. The court did not decide the validity of the 1967 dual-jobs regulation, and the distinction between tipped and separate non-tipped occupations remains important. State limits in New York, Colorado, and Connecticut require their own analysis; the federal vacatur did not invalidate those state rules.
Samiento v. World Yacht Inc.#
10 N.Y.3d 70 (2008) (N.Y. Court of Appeals 2008)
A mandatory service charge that a reasonable customer would understand to be a gratuity is a "charge purported to be a gratuity" under Labor Law §196-d and must be distributed to service staff.
Why hotels care: The origin of New York banquet service-charge litigation. A charge presented as a gratuity belongs to eligible service staff. New York’s hospitality regulations presume certain added charges to be gratuities, but permit rebuttal with adequate notice that the charge is not a gratuity; a retained administrative charge needs the required clear disclosure in the customer documents.
United States v. Fior d'Italia, Inc.#
536 U.S. 238 (2002) (U.S. Supreme Court 2002)
The IRS may use a reasonable aggregate estimate of employees’ total tips, including cash tips estimated from credit-card data to assess the employer's share of FICA taxes on tips, rather than reconstructing each employee's tips individually.
Why hotels care: Underreported banquet, valet, or spa tips expose the hotel to an aggregate FICA assessment under section 3121(q) — years later, computed against the house. The case for TRAC/GITCA agreements and disciplined monthly tip reporting.
Villon v. Marriott Hotel Services, Inc.#
130 Haw. 130 (2013) (Haw. Supreme Court 2013)
Hotel employees may sue under Hawaii's wage statutes when an employer retains a service charge without the disclosure HRS §481B-14 requires.
Why hotels care: Hawaii’s disclose-or-distribute rule has a private enforcement path. Rodriguez v. Mauna Kea Resort LLC (Haw. Aug. 25, 2025) clarified that if only part of a service charge goes to staff as tips, the purchaser must be clearly told the amount or percentage. A vague statement that a portion goes to tips or wages is inadequate; no disclosure is required when the entire charge is distributed as employee tip income.
Exemptions & the salary-basis trap#
Whether a banquet manager, chief engineer, or task-force lead is exempt is usually litigated as a duties question — but these cases show the fight is often lost a step earlier, on how the person is paid. A high annual total does not cure day- or shift-rate pay lacking a compliant salary or §541.604(b) weekly guarantee; the applicable salary level and duties tests must also be satisfied. See exemptions.
Christopher v. SmithKline Beecham Corp.#
567 U.S. 142 (2012) (U.S. Supreme Court 2012)
Denied deference to the DOL's late-announced reading of its own rule where employers had long relied on the opposite understanding — agencies cannot impose new interpretations by "unfair surprise."
Why hotels care: Unfair surprise can defeat deference to an agency’s changed interpretation; it does not automatically immunize an employer from the statute or regulation correctly interpreted. Kisor v. Wilkie, 588 U.S. 558, 579–580 (2019), retained this limitation on deference, while Loper Bright separately governs statutory interpretation.
Encino Motorcars, LLC v. Navarro#
584 U.S. 79 (2018) (U.S. Supreme Court 2018)
FLSA exemptions receive a "fair reading," not the historically narrow construction against employers.
Why hotels care: Apply the exemption’s text fairly and prove its factual requirements. E.M.D. Sales, Inc. v. Carrera (U.S. Jan. 15, 2025) confirms that the employer bears the ordinary preponderance-of-the-evidence burden, rather than a heightened clear-and-convincing standard, when establishing an FLSA exemption.
Helix Energy Solutions Group, Inc. v. Hewitt#
598 U.S. 39 (2023) (U.S. Supreme Court 2023)
Daily-rate pay alone did not satisfy the executive exemption’s salary-basis requirement, even at high annual earnings. A daily-, hourly-, or shift-rate arrangement can satisfy §541.604(b) with the required weekly guarantee and a reasonable relationship between that guarantee and usual earnings.
Why hotels care: A high annual total does not cure a defective pay structure. Use a compliant salary or a qualifying §541.604(b) guarantee, and satisfy the applicable duties and salary-level tests; otherwise pay overtime.
Compensable time & the continuous workday#
What counts as "hours worked" is the most jurisdiction-split question in the field. Federal law excludes the commute and merely preliminary or postliminary tasks unless they are integral and indispensable; California asks instead whether the employer exercised control — and reaches the opposite result on security screening, mandatory travel, and on-call time. The common thread for hotels: small recurring increments (radio pickup, a bag check, a shuttle ride, a closing alarm) aggregate into real liability, and when the records are silent the employee's estimate becomes the evidence under Mt. Clemens. See off-the-clock work.
Anderson v. Mt. Clemens Pottery Co.#
328 U.S. 680 (1946) (U.S. Supreme Court 1946)
Where the employer's time records are inadequate, employees may prove hours by just and reasonable inference, shifting the burden to the employer to rebut.
Why hotels care: The reason recordkeeping wins or loses cases: without clean records, the housekeeper's recollection of daily unpaid linen runs becomes the evidence.
Fast v. Applebee's International, Inc.#
638 F.3d 872 (8th Cir. 2011) (8th Cir. 2011)
Deferred to the DOL's 20% limit on related, untipped side work before the tip credit is lost — entrenching the "80/20" rule in federal litigation.
Why hotels care: The decision that fueled a decade of side-work class actions; the historical anchor for why the 2024 vacatur of the 80/20/30 rule matters and why plaintiffs still plead legacy 80/20 theories.
Frlekin v. Apple Inc.#
8 Cal.5th 1038 (2020) (Cal. Supreme Court 2020)
Time spent in mandatory exit bag searches is compensable "hours worked" under California's control test.
Why hotels care: The direct counterpoint to Busk: California hotel security screening, bag checks, and similar controlled time must be on the clock.
Huerta v. CSI Electrical Contractors#
15 Cal.5th 908 (2024) (Cal. Supreme Court 2024)
Required exit security checks, including waiting for a vehicle inspection, were compensable. Ordinary on-premises driving subject only to standard workplace rules was not “hours worked.” Wage Order 16 separately covers employer-mandated travel after a required reporting location when the reporting serves an employment purpose beyond merely accessing the site.
Why hotels care: Assess required resort security procedures and transportation under the applicable wage order and degree of employer control. Huerta does not make every drive or walk on hotel property compensable, and Wage Order 16’s special travel provision is not a general hotel rule.
IBP, Inc. v. Alvarez#
546 U.S. 21 (2005) (U.S. Supreme Court 2005)
Once the first principal activity of the day occurs, the "continuous workday" runs: time walking and waiting between integral activities is compensable, though time before the first such activity generally is not.
Why hotels care: Identify the actual first and last principal activities; merely requiring a task does not make it integral and indispensable. Intervening travel and waiting generally count, while bona fide meal periods and postliminary activities after the last principal activity require separate analysis. Santos v. Lidl US, LLC, No. 25-2357 (2d Cir. Oct. 13, 2026), also recognizes a claim where employees allegedly had to report early ready to work but were left waiting for the store to open; the court reversed dismissal, rather than deciding final liability.
Integrity Staffing Solutions, Inc. v. Busk#
574 U.S. 27 (2014) (U.S. Supreme Court 2014)
Post-shift security screening time is not compensable under the FLSA because it is not integral and indispensable to the employees' principal activities.
Why hotels care: Busk holds the warehouse screening at issue noncompensable under federal law; California’s control test can require pay for mandatory exit searches (see Frlekin). Multi-state hotel groups need a state-by-state screening-time policy — or simply pay for it everywhere.
Lindow v. United States#
738 F.2d 1057 (9th Cir. 1984) (9th Cir. 1984)
Established the federal de minimis factors — the practical administrative difficulty of recording the time, the aggregate amount claimed, and the regularity of the work — for excluding trivial increments.
Why hotels care: The Ninth Circuit reaffirmed this federal test in Cadena v. Customer Connexx LLC (July 10, 2024), holding that Sandifer did not displace it and that disputed evidence precluded summary judgment on regular computer-startup time. Small duration alone does not establish the defense. But California rejects de minimis for regular off-the-clock work (Troester), so multi-state hotels should capture the time everywhere.
Mendiola v. CPS Security Solutions, Inc.#
60 Cal.4th 833 (2015) (Cal. Supreme Court 2015)
Under Wage Order 4, the residential security guards’ employer-controlled on-call time was compensable, and their agreements did not permit a federal-style sleep-time deduction. The court expressly limited its sleep-time holding to that wage order.
Why hotels care: A hotel must identify the governing wage order and the actual restrictions. Wage Order 5 has a specific hours-worked definition for employees required to reside on the premises, as well as particular exceptions; Mendiola does not erase those provisions. A federal sleep-time agreement alone is not a substitute for the California analysis.
Morillion v. Royal Packing Co.#
22 Cal.4th 575 (2000) (Cal. Supreme Court 2000)
Time spent in employer-mandated travel on employer-provided transportation is compensable hours worked under California's control test, even if no work is performed en route.
Why hotels care: A mandatory employer shuttle that prevents employees from choosing their own transportation can create paid controlled time in California. Optional transport and ordinary on-premises travel are different; federal compensability also depends on the trip and any principal work performed, rather than on a categorical commute exemption.
Sandifer v. United States Steel Corp.#
571 U.S. 220 (2014) (U.S. Supreme Court 2014)
Time spent "changing clothes" can be excluded from compensable time by a collective bargaining agreement under FLSA §203(o); protective gear that is essentially clothing counts.
Why hotels care: Relevant to unionized hotels negotiating uniform-change pay. Outside a qualifying §203(o) CBA exclusion, federal compensability still turns on whether changing is integral and indispensable to the work; an employer requirement alone is insufficient. State law, including California’s control test, must be evaluated separately.
Troester v. Starbucks Corp.#
5 Cal.5th 829 (2018) (Cal. Supreme Court 2018)
California has not adopted the federal de minimis doctrine for regularly recurring small increments of off-the-clock work, such as daily closing tasks.
Why hotels care: Minutes matter in California: post-clock-out alarm-setting, cash drops, or lock-ups at hotel outlets accrue real liability across a workforce. Capture all time.
California's premium-and-penalty architecture#
California stacks remedies in a way no other state does, and these cases assemble the stack link by link: meal- and rest-break premiums must be provided (not policed) and paid at the regular rate of compensation (Ferra), those premiums are wages (Naranjo I) — which means a missed one cascades into wage-statement and waiting-time penalties — unless the employer's objectively reasonable good faith defeats the "knowing" and "willful" elements (Naranjo II); meanwhile timekeeping records that show violations create a rebuttable presumption (Donohue) and the era of rounding is ending (Camp, now before the Supreme Court — see the watch list). Reporting-time, split-shift, and flat-sum-bonus overtime rules layer on top. See meal & rest breaks and PAGA.
Alvarado v. Dart Container Corp.#
4 Cal.5th 542 (2018) (Cal. Supreme Court 2018)
For California overtime, a flat-sum bonus must be divided by the non-overtime hours actually worked — not by all hours — inflating the resulting overtime rate.
Why hotels care: A qualifying nondiscretionary flat-sum bonus can increase California overtime more than the federal all-hours method suggests. Determine the bonus’s actual terms and earning period: production-based bonuses and payments lawfully excluded from the regular rate require different treatment.
Augustus v. ABM Security Services, Inc.#
2 Cal.5th 257 (2016) (Cal. Supreme Court 2016)
Rest breaks must be duty-free and free of employer control; requiring employees to remain on call during a rest period — even if rarely interrupted — violates California law.
Why hotels care: Requiring security or engineering staff to monitor a radio and remain ready to respond prevents a duty-free rest period. If a break is interrupted, provide a compliant replacement or pay the applicable rest-period premium; the decision does not make mere voluntary possession of a radio a violation.
Brinker Restaurant Corp. v. Superior Court#
53 Cal.4th 1004 (2012) (Cal. Supreme Court 2012)
Employers must provide meal periods — relieve employees of all duty and relinquish control — but need not police them to ensure no work is performed; timing rules for first and second meals clarified.
Why hotels care: The framework for every California break policy: provide the first meal no later than the end of the fifth hour and the second no later than the end of the tenth, subject to lawful exceptions and waivers, and genuinely relieve duty. Bradsbery v. Vicar Operating, Inc. (2025) upheld prospective, revocable written meal waivers for shifts no longer than six hours on a record with no claim of coercion or uninformed consent; it does not authorize waivers beyond the statutory limits.
Donohue v. AMN Services, LLC#
11 Cal.5th 58 (2021) (Cal. Supreme Court 2021)
Employers cannot round meal-period time punches, and records showing missed, short, or late meal periods raise a rebuttable presumption of violations.
Why hotels care: Time records can establish the rebuttable presumption. Review exceptions, preserve evidence of compliant opportunities and voluntary employee choices, and pay premiums for meal periods the employer failed to provide; a short, late, or missing punch is not irrebuttable liability.
Ferra v. Loews Hollywood Hotel, LLC#
11 Cal.5th 858 (2021) (Cal. Supreme Court 2021)
Meal- and rest-break premium pay must be calculated at the "regular rate of compensation" — including nondiscretionary incentive pay — not the base hourly rate; applied retroactively.
Why hotels care: A hotel case from the caption down: room-upsell bonuses, service-charge shares, and incentive pay all inflate the premium rate. Paying break premiums at base rate is systematic underpayment.
Hartstein v. Hyatt Corp.#
82 F.4th 825 (9th Cir. 2023) (9th Cir. 2023)
Held that a hotel's COVID-era furlough without a specific return date within the normal pay period was a discharge triggering Labor Code §201: accrued wages and vested vacation payable under §227.3 were due immediately. The court remanded the separate question of willfulness for waiting-time penalties.
Why hotels care: A hotel case on point: indefinite furloughs and seasonal layoffs can trigger immediate accrued-vacation payout and final-pay timing in California — budget the PTO liability before pausing a property.
Murphy v. Kenneth Cole Productions, Inc.#
40 Cal.4th 1094 (2007) (Cal. Supreme Court 2007)
The one-hour meal- and rest-break premium under Labor Code section 226.7 is a wage, not a penalty, so the longer three-year (not one-year) statute of limitations applies.
Why hotels care: Premiums-as-wages extends the lookback on break claims and is the doctrinal seed of Naranjo's derivative wage-statement and waiting-time exposure.
Naranjo v. Spectrum Security Services, Inc. (I & II)#
13 Cal.5th 93 (2022); 15 Cal.5th 1056 (2024) (Cal. Supreme Court 2024)
Break premiums are "wages" that trigger wage-statement and waiting-time penalty exposure (Naranjo I); but an employer's objectively reasonable, good-faith belief that it complied defeats the "knowing and intentional" and "willful" elements of those penalties (Naranjo II).
Why hotels care: Defines the derivative-penalty stack on every California break case — and the documented-good-faith off-ramp. Written compliance analyses now have direct penalty-defense value.
Ward v. Tilly's, Inc.#
31 Cal.App.5th 1167 (2019) (Cal. Ct. App. 2019)
On-call scheduling requiring employees to phone in two hours before a potential shift triggers California reporting-time pay even when the employee never physically reports.
Why hotels care: A required advance call can constitute reporting for work even without a trip to the property. Ward applied Wage Order 7; hotel employers should assess their call-in practices under the parallel reporting-time language of Wage Order 5 and pay the amount due when the rule applies.
Classification & joint employment#
Two questions decide who is on the hook for a wage bill: is the worker an employee at all, and is more than one entity the employer? The cases run from the Supreme Court's original economic-reality test through the California ABC test (whose prong B is fatal to treating housekeeping, banquet, or valet labor as contracting) to the vertical joint-employment factors that pull a brand, an owner, or a staffing platform into shared liability. The structural lesson for hotels is that EINs and indemnity clauses move money, not liability. See independent contractors and joint employer.
Barfield v. New York City Health & Hospitals Corp.#
537 F.3d 132 (2d Cir. 2008) (2d Cir. 2008)
Applied the broad FLSA functional joint-employment test to hold an entity that used agency-referred workers a joint employer responsible for overtime.
Why hotels care: Staffing platforms (Instawork, Qwick) supplying banquet or housekeeping labor can make the hotel a joint employer for the hours those workers spend on its floor, whatever the platform's terms say.
Dynamex Operations West, Inc. v. Superior Court#
4 Cal.5th 903 (2018) (Cal. Supreme Court 2018)
Adopted the ABC test for independent-contractor status under the California wage orders: the hiring entity must prove freedom from control, work outside its usual course of business, and an independently established trade.
Why hotels care: Directly hiring individuals for the hotel’s ordinary housekeeping, banquet, or valet work creates a serious prong-B problem. Apply the statutory coverage and exemptions and the actual hiring relationship; using a separate service company also requires a distinct joint-employer analysis.
Hargrove v. Sleepy's, LLC#
220 N.J. 289 (2015) (N.J. Supreme Court 2015)
New Jersey applies the ABC test to wage-and-hour independent-contractor disputes.
Why hotels care: Atlantic City and shore hotels using contracted banquet staff, valet operators, or shuttle drivers face one of the country's strictest classification regimes.
Irizarry v. Catsimatidis#
722 F.3d 99 (2d Cir. 2013) (2d Cir. 2013)
An owner or officer with operational control over significant aspects of the company and authority over pay policy is personally an "employer" under the FLSA, jointly liable for unpaid wages.
Why hotels care: An owner or principal with the required operational control can be directly liable as an employer. This is statutory employer liability based on the economic reality, not an automatic veil-piercing rule based on ownership alone.
Rutherford Food Corp. v. McComb#
331 U.S. 722 (1947) (U.S. Supreme Court 1947)
Employee status under the FLSA turns on the economic reality of the whole working arrangement, not on labels, contracts, or isolated factors.
Why hotels care: The origin of the economic-reality test. A contract calling banquet, valet, or housekeeping labor "independent" does not control if the economic reality is employment.
Salazar v. McDonald's Corp.#
944 F.3d 1024 (9th Cir. 2019) (9th Cir. 2019)
A franchisor was not the joint employer of franchisee employees under California's control-based tests where it did not control day-to-day hiring, firing, wages, or supervision.
Why hotels care: Brand standards alone did not establish employment on this record. Apply California’s alternative employment tests to the actual authority retained or exercised in a hotel’s franchisor, owner, and operator relationships; Salazar creates no categorical franchisor exemption. Statutory client-employer liability under Labor Code §2810.3 is a separate inquiry.
Zheng v. Liberty Apparel Co.#
355 F.3d 61 (2d Cir. 2003) (2d Cir. 2003)
Set a multi-factor functional test for joint employment that reaches beyond formal control to economic dependence and the degree to which work is integral to the alleged employer's business.
Why hotels care: The Second Circuit’s FLSA framework can establish a hotel’s joint employment of staffing-agency or subcontracted workers through functional control, even without formal hiring or payroll authority. The nonexclusive factors require a fact-specific assessment; ordinary outsourcing does not automatically establish liability.
Hotel-specific ordinances#
Hotels are now a regulated industry in their own right, and employers have repeatedly tried — and mostly failed — to strike the local laws down. These decisions establish that hotel minimum-wage, workload, retention, and healthcare-expenditure ordinances survive NLRA Machinists and ERISA preemption as generally applicable minimum labor standards, and that subsidy-triggered living-wage mandates have real teeth. The takeaway: budget these requirements as fixed wage costs, not litigation risks. See hotel ordinances.
American Hotel & Lodging Ass'n v. City of Los Angeles#
834 F.3d 958 (9th Cir. 2016) (9th Cir. 2016)
Affirmed denial of a preliminary injunction against Los Angeles’s 2014 hotel wage ordinance, rejecting the asserted Machinists NLRA-preemption challenge to its minimum standards and collective-bargaining opt-out.
Why hotels care: Supports minimum labor standards and appropriately drawn CBA waivers. It does not decide every constitutional or statutory challenge to a later hotel ordinance; analyze the challenged provision and the governing preemption rule.
Columbia Sussex Management, LLC v. City of Santa Monica#
C.D. Cal. 2019–2020 (C.D. Cal. 2020)
After denying preliminary relief in December 2019, the district court dismissed the challenge with prejudice in August 2020. It rejected NLRA Machinists and Cal/OSHA preemption and dormant-Commerce-Clause claims against Santa Monica’s workload and related collective-bargaining-waiver provisions.
Why hotels care: The Ninth Circuit appeal became moot after the challengers sold their hotel interests. On August 24, 2021, the district court declined to vacate its judgment on remand. The district ruling therefore remained in place without an appellate merits affirmance; apply the actual ordinance and waiver language at the property.
ERISA Industry Committee v. City of Seattle#
9th Cir. 2021 (unpublished), cert. denied (Nov. 2022) (9th Cir. 2021)
In a nonprecedential March 17, 2021 memorandum, the Ninth Circuit applied Golden Gate and affirmed dismissal of the ERISA-preemption challenge to Seattle’s SMC 14.28 healthcare-expenditure ordinance. The Supreme Court denied certiorari on November 21, 2022.
Why hotels care: Seattle’s cash-payment option was central to the Golden Gate analysis. Budget the applicable healthcare obligation, but assess other ordinances—including Los Angeles’s payment—under their own text and governing law; this memorandum did not adjudicate them.
Filo Foods, LLC v. City of SeaTac#
183 Wn.2d 770 (2015) (Wash. Supreme Court 2015)
SeaTac's Proposition 1 hospitality minimum wage is enforceable at Sea-Tac International Airport, and its worker-retention provision is not NLRA- or RLA-preempted.
Why hotels care: Validated the original hospitality-specific living-wage initiative — the template for the LA, Long Beach, and Oakland hotel wage measures that followed.
Grace v. Walt Disney Parks & Resorts U.S., Inc.#
Cal. Ct. App., 4th Dist. (July 2023), review denied (Oct. 2023) (Cal. Ct. App. (4th Dist.) 2023)
The court reversed summary judgment because Disney’s reimbursement agreement gave it a contingent right to rebates of incremental taxes, a “city subsidy” under Anaheim Measure L. The right qualified even though Disney had not received an actual rebate.
Why hotels care: Review the actual subsidy agreement and local definition. The ensuing $233 million Disney settlement received final approval in an order filed September 16, 2025 and became effective November 17, 2025, according to the settlement administrator. The settlement resolved the claims without an admission of liability.
Procedure, arbitration & collective actions#
Most wage exposure is settled by procedure before it is decided on the merits. This group maps the battlefield: arbitration agreements with class waivers are enforceable and route claims out of court, but representative PAGA claims and FLSA collective actions resist that channel; certification, notice, and statistical or representative proof determine whether one plaintiff becomes a class; and the effectiveness of a private FLSA compromise depends on the governing circuit and the nature of the dispute. For a multi-property operator, the arbitration program and the records that defeat certification are the whole ballgame. See PAGA & class actions.
Adolph v. Uber Technologies, Inc.#
14 Cal.5th 1104 (2023) (Cal. Supreme Court 2023)
A PAGA plaintiff compelled to arbitrate individual claims retains standing to pursue non-individual claims on behalf of other employees in court.
Why hotels care: Individual arbitration alone does not eliminate representative exposure. The arbitrator’s resolution of aggrieved-employee status can affect the remaining action; apply Adolph together with the standing, scope, and penalty provisions governing the claim’s filing date.
Brooklyn Savings Bank v. O'Neil#
324 U.S. 697 (1945) (U.S. Supreme Court 1945)
Invalidated private waivers of undisputed statutory wages and liquidated damages. The Court expressly left open the treatment of a bona fide compromise of disputed claims.
Why hotels care: A general release does not automatically bar unpaid-wage or liquidated-damages claims. Use §216(c) supervision or a settlement that satisfies the governing circuit’s rules; Lynn’s Food and the Fifth Circuit’s Bodle describe different approaches to disputed compromises. The Third Circuit’s Lundeen v. 10 W. Ferry Street Operations (Oct. 16, 2025) separately permits a court-approved Rule 23(b)(3) opt-out settlement to release unasserted FLSA claims, subject to the court’s fairness review. Clear notice and a meaningful opportunity to opt out matter; that ruling does not authorize unrestricted private waivers.
Epic Systems Corp. v. Lewis#
584 U.S. 497 (2018) (U.S. Supreme Court 2018)
The FAA requires enforcement of agreements providing for individualized arbitration; the NLRA’s concerted-activity protection does not itself invalidate class- and collective-action waivers.
Why hotels care: An enforceable agreement covered by the FAA can require individual arbitration of wage claims. Formation, generally applicable contract defenses, and applicable statutory exceptions still matter; careful drafting and rollout alone do not resolve every enforceability issue.
Estrada v. Royalty Carpet Mills, Inc.#
15 Cal.5th 582 (2024) (Cal. Supreme Court 2024)
Trial courts do not have inherent authority to strike a PAGA claim on the ground that it would be unmanageable to try.
Why hotels care: Estrada rejects inherent dismissal for unmanageability. For actions governed by the 2024 amendments, Labor Code §2699(p) expressly permits limits on trial evidence or claim scope to make the case effectively triable; the statutory effective-date rules and penalty-reduction requirements must be applied separately.
Hoffmann-La Roche Inc. v. Sperling#
493 U.S. 165 (1989) (U.S. Supreme Court 1989)
In an ADEA action using the FLSA’s §216(b) procedure, held that district courts may facilitate notice to potential opt-in plaintiffs in appropriate cases while maintaining judicial neutrality.
Why hotels care: The basis for court-supervised collective-action notice, with timing, scope, and evidentiary standards governed by the controlling circuit. Hoffmann-La Roche did not prescribe a single national certification procedure; recent decisions, including the Seventh Circuit’s Richards and the Ninth Circuit’s Harrington, illustrate the differences.
Lynn's Food Stores, Inc. v. United States#
679 F.2d 1350 (11th Cir. 1982) (11th Cir. 1982)
The Eleventh Circuit held that an FLSA wage compromise requires DOL supervision or a court-approved resolution of an employee suit. The employer’s unsupervised agreements with unrepresented workers were ineffective.
Why hotels care: Apply the governing circuit. The Eleventh Circuit continues to apply this rule to FLSA claims (O’Neal v. American Shaman, No. 24-10900, Feb. 11, 2026). O’Neal also holds that a release of non-FLSA claims in the same agreement is governed by ordinary contract law and is not automatically invalidated by the defective FLSA release. The Fifth Circuit recognizes a limited bona fide wage-or-hours dispute exception (Bodle v. TXL Mortgage, 788 F.3d159 (2015)); an unrelated general release is insufficient.
Reuter v. City of Methuen#
489 Mass. 465 (2022) (Mass. Supreme Judicial Court 2022)
Treble damages under the Massachusetts Wage Act are mandatory and automatic — they apply even where the employer paid the wages late but before any lawsuit, and there is no good-faith defense to reduce them.
Why hotels care: Late payment of wages covered by the Wage Act can trigger mandatory treble damages even when corrected before suit. Pay on time and correct any shortfall promptly; later payment does not erase the statutory violation.
Swales v. KLLM Transport Services, L.L.C.#
985 F.3d 430 (5th Cir. 2021) (5th Cir. 2021)
Rejected the lenient two-step conditional-certification approach: a court must rigorously analyze whether employees are "similarly situated" before authorizing collective notice.
Why hotels care: Use the governing circuit’s notice standard. Swales remains the Fifth Circuit rule; the Ninth Circuit retained two-stage analysis in Harrington (2025), while the Seventh Circuit adopted a material-factual-dispute threshold in Richards (2025), considering both sides’ evidence before deciding how to proceed.
Tyson Foods, Inc. v. Bouaphakeo#
577 U.S. 442 (2016) (U.S. Supreme Court 2016)
Representative or statistical (averaging) evidence may establish classwide liability where each class member could have relied on that same evidence in an individual suit — especially where the employer's records are inadequate.
Why hotels care: Reliable representative evidence can fill recordkeeping gaps under Mt. Clemens, but its admissibility and sufficiency depend on the employees’ claims and the evidence. Accurate records help test those inferences; they do not by themselves defeat certification, and averages do not dispense with the applicable class or collective-action requirements.
Viking River Cruises, Inc. v. Moriana#
596 U.S. 639 (2022) (U.S. Supreme Court 2022)
The FAA preempts the rule forbidding the division of individual from non-individual PAGA claims, allowing enforcement of an agreement to arbitrate the individual claim. It does not authorize a wholesale waiver of PAGA claims. Adolph later rejected Viking River’s prediction that individual arbitration necessarily eliminates standing to litigate the non-individual claims.
Why hotels care: Together with Adolph, defines the arbitration playbook for California hotel PAGA exposure: compel the individual claim, then fight about what happens to the representative remainder.
Watch list — pending & unsettled#
Four open questions will move hotel exposure within months, and each is flagged in place with the date of its last development. Treat the rules below as provisional: the site states the current operative standard and the safe-harbor practice that holds regardless of how each case resolves, rather than betting on an outcome. Track movement on the developments page.
Camp v. Home Depot U.S.A., Inc.#
84 Cal.App.5th 638 (2022), review granted, S277518 (Cal. 2023) (Cal. Ct. App. (6th Dist.) 2022) Review granted, Cal. Supreme Court
An employer that can and does capture employees' exact worked minutes must pay for all of them; quarter-hour rounding that underpaid the plaintiff was unlawful. California Supreme Court review was granted in 2023; the court’s October 16, 2026 pending-issues list still includes the case. The appellate opinion has persuasive rather than binding precedential status while review is pending under rule 8.1115(e).
Why hotels care: The validity of neutral California time rounding remains under Supreme Court review. Paying recorded actual time avoids that dispute; meal-period punches separately cannot be rounded under Donohue.
Grant v. Global Aircraft Dispatch, Inc.#
223 A.D.3d 712 (2d Dep't 2024) (N.Y. App. Div. 2024) Earlier split; statute amended
Held there is no private right of action for a frequency-of-pay violation under Labor Law section 191 — directly contrary to Vega.
Why hotels care: Grant rejected Vega’s interpretation of the earlier statutory text. Current exposure also requires applying the May 2025 amendment to §198, including its regular-payment and qualifying prior-finding conditions; do not use the historical split as the entire current rule.
Leeper v. Shipt, Inc.#
107 Cal.App.5th 1001 (2024), review granted, S289305 (Cal. Ct. App. 2024) Pending, Cal. Supreme Court
Held that every PAGA action necessarily includes an individual component, so a plaintiff cannot plead a representative-only "headless" claim to escape arbitration. The California Supreme Court granted review; a contrary appellate decision exists. Review remains pending, with argument scheduled for November 3, 2026. The reviewed appellate opinion may be cited for persuasive value under rule 8.1115(e), but is not binding precedent while review is pending.
Why hotels care: Decides whether California hotels can compel a headless-PAGA plaintiff's individual claim to arbitration — the single most consequential open question for California representative-action strategy.
Vega v. CM & Associates Construction Management, LLC#
175 A.D.3d 1144 (1st Dep't 2019) (N.Y. App. Div. 2019) Earlier split; statute amended
Recognized a private right of action with liquidated damages for the late (frequency-of-pay) payment of "manual workers" under Labor Law section 191, even when wages are eventually paid in full.
Why hotels care: The theory behind the wave of New York weekly-pay class actions against hotels. The May 2025 amendment supplies specific remedial rules for timely-frequency violations, including regular-payment and qualifying prior-finding conditions. Apply that current text rather than treating Vega’s earlier liquidated-damages analysis as unchanged.