An investigation into the wage and tip practices of Massachusetts’ MGM Springfield has ended with the company agreeing to pay a multi-million dollar settlement with the state.
The hotel and casino destination is located in the heart of Metro Center, Springfield, and was accused in 2018 of violating state wage laws. As a result of the alleged violations, MGM Springfield has agreed to a $6.8 million settlement with the Massachusetts Attorney General’s office. $461,587.36 of the settlement funds will be used to compensate over 2,000 workers who were impacted by the wage and hour violations. The remaining $6.4 million will be paid out as a penalty to the commonwealth.
The Attorney General’s office said the MGM Springfield allegedly did not pay overtime to workers who were classified as tipped employees. Additional wage accusations included management unlawfully retaining employee tips, the establishment’s failure to make timely payment of wages to employees, and failure to provide workers with paid earned sick time.
The allegations against MGM Springfield and the managing staff stemmed from a multi-year investigation that found at least 2,036 workers were not receiving fair pay. Workers, most of whom were hourly wage workers, including servers, bartenders, game dealers, ushers, and kitchen staff, were the most likely to be impacted by these wage violations, according to the AG’s office.
Around October 2018, MGM employees began making complaints to the Attorney General's office about the pay discrepancies. Some of the employees would go on to file lawsuits of their own, as was the case with a then-MGM dealer, Shawn Connors. Conners accused the company in a complaint he filed in October 2019. He details in his complaint that he is entitled to more than the wages he was being paid because he was paid at an hourly rate of $5 per hour, plus tips. However, he was never notified, as required by state law, that he would earn such a low basic rate.
As with other complaints, Connors says that MGM Springfield also underpaid its tipped employees who worked overtime.
Under Massachusetts state law, workers who work overtime are entitled to overtime pay of one and a half times an employee’s regular hourly rate as outlined by G.L. c. 151, section 1A-1B.
AG Andrea Campbell shared in a statement about the case, “MGM Springfield’s failure to provide its employees, especially service workers earning an hourly wage and relying on tips, with their full wages and benefits made it more difficult for these employees to take care of themselves and their families. My office will continue to hold accountable those who violate our wage and hour laws.”
As part of the settlement agreement, MGM Springfield will implement and enter into a compliance program that ensures the company adheres to state and federal wage laws.
Dara Cohen, the director of regional corporate communications for MGM Resorts International, shared in a separate statement that MGM has been “proactive” in coming to a resolution regarding the investigation.
“We take our compliance obligations seriously and have made proactive updates since 2019 to address this issue. We will continue to invest in training and regular reviews of our policies and procedures to ensure ongoing compliance,” Cohen said.
The compliance program will require annual training for all HR, payroll, and legal personnel, periodic auditing and monitoring, and other conditions. The company will be required to be a part of this compliance program for two years.
Despite entering into the settlement, MGM Springfield does not admit to any wrongdoing.
