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5th - FLSA doesn’t require paying recruitment, transportation, visa expenses for foreign guest workers
July 24, 2009 by Ross Runkel at LawMemo
Following Hurricane Katrina, Decatur Hotel in New Orleans brought in a number of workers from outside the United States. Daniel Castellanos-Contreras and other guest workers (holding H-2B visas) sued the hotel, their employer, asserting a claim for failure to pay minimum wages under the Fair Labor Standards Act (FLSA).
The trial court denied the employer’s summary judgment motion, granted Castellanos-Contreras’ summary judgment motion in part, and certified an order for interlocutory appeal. The 5th Circuit reversed and rendered judgment in the employer’s favor. Castellanos-Contreras v. Decatur Hotels (5th Cir 07/21/2009)
Castellanos-Contreras alleged that the employer violated the FLSA by refusing to reimburse him for recruitment, transportation, and visa costs incurred prior to his relocation to the United States for work, since payment of those expenses resulted in less than minimum wages for his work.
As a matter of first impression, the 5th Circuit held that (1) the FLSA applies to guest workers, but (2) the FLSA does not obligate an employer to reimburse such workers for recruitment, transportation, or visa expenses incurred prior to relocation.
The court rejected the argument that 29 USC Section 203(m) of the FLSA, or 29 CFR Section 531.35, requires employers to pay these expenses.
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