MGM Springfield Settles Investigation with Massachusetts Attorney General’s Office
Posted on: October 27, 2023, 08:23h.
Last updated on: October 27, 2023, 08:24h.
MGM Springfield has reached a settlement with the Massachusetts Attorney General’s Office and its Fair Labor Division, agreeing to pay over $6.8 million in restitution and penalties. The settlement resolves a multi-year investigation into employee compensation violations at the casino resort.
MGM Springfield, a $960 million casino resort that opened in August 2018, violated employee compensation statutes during its initial year and a half of operation, as confirmed by state officials. The investigation, prompted by multiple complaints, revealed that the company failed to meet minimum wage requirements for tipped employees, neglected to pay overtime wages, retained tips unlawfully, delayed payments, and disregarded paid sick time for eligible staff members.
According to Massachusetts Attorney General Joy Campbell, the failure to compensate employees fully had a detrimental impact on their well-being and ability to support themselves and their families. The attorney general’s office is committed to enforcing wage and hour laws and holding accountable those who violate them.
While MGM Springfield did not admit guilt, it agreed to pay a total of $6,839,287.36 in restitution and fines to affected workers. The settlement amount will be distributed to employees who filed claims, with individual payouts ranging from $50 to over $18,000.
Bulk of Funds to be Paid to State
Within 30 days of the settlement consent, MGM Springfield is obligated to compensate employees in full. Impacted workers currently employed will receive their portion via direct deposit, while former employees will receive checks by mail. All recipients will be notified by the company that the payments are the result of a settlement with the state attorney general.
The attorney general’s office has determined the back pay to amount to $461,587.36. Following standard withholdings and deductions, the funds will be electronically transferred to eligible workers. Former employees will receive their share by mail.
In response to the settlement, MGM Resorts International Corporate Communications Director Dara Cohen emphasized the company’s commitment to compliance, highlighting previous updates made since 2019 to address the issue. Additional measures include ongoing training and regular policy and procedure reviews to ensure ongoing adherence to wage and hour regulations.
The remaining $6,377,700 from the settlement will be paid to the commonwealth through the attorney general’s office. A state-appointed independent compliance monitor will be funded with a portion of the money to provide regular training on wage and hour compliance to MGM Springfield management. Additionally, the resort will undergo two annual wage and hour audits conducted by a third party, with the findings submitted to the state attorney general.
Wide-Ranging Violations
The investigation by the attorney general’s office revealed that MGM Springfield’s pay violations were pervasive throughout the resort. Of the 2,036 affected workers, individuals were employed in various roles, including table game dealers, casino floor attendants, banquet servers, bartenders, ushers, kitchen staff, housekeepers, and security personnel.
Specific infractions included the participation of management in waitstaff tip-pooling, underpayment of hourly workers for overtime hours, and the requirement for security guards to work through their meal breaks. While tip-pooling is not illegal in Massachusetts, the state’s legislation on the practice stipulates that only hourly workers directly generating tips are eligible to share in the pooled funds, excluding managers.