| Chris Maza
[email protected]
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SPRINGFIELD — MGM Springfield is on the hook for nearly $7 million in restitution and damages for wage and hour violations after reaching a settlement with the Attorney General’s Office.
Attorney General Andrea Campbell’s staff announced the more than $6.8 million settlement on Oct. 25, ending a process that began in October 2018 — shortly after the Springfield casino opened — when the office’s Fair Labor Division started receiving complaints about the management’s practices.
In all, more than 2,000 were impacted, the majority of whom were hourly workers, including table game dealers, banquet servers and bartenders, ushers, kitchen staff, casino floor and hotel staff, warehouse personnel, cleaners and security personnel. They will receive a share of $461,587.36 in restitution within 30 days of the settlement. Each of the 2,036 impacted employees will receive checks for specific restitution amounts.
The remaining nearly $6.4 million will be paid as a penalty to the commonwealth, which will be put in the general fund.
According to the Attorney General’s Office, complainants alleged MGM management illegally participated in wait staff tip pooling, underpaid service-rate employees for overtime and required security to work through meal breaks without compensation. In the end, the Attorney General’s Office determined MGM Springfield had committed a series of wage and hour violations — failure to pay minimum wage to tipped employees, failure to pay overtime wages, unlawful tip retention by management, failure to make timely payments of wages, and failure to provide paid earned sick time.
“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,” said Campbell said in a prepared statement. “My office will continue to hold accountable those who violate our wage and hour laws.”
Dara Cohen, director of regional corporate communications for MGM Resorts International, said in her own statement, that MGM has been “proactive” in rectifying the issues that led to the complaints that launched 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.
In addition to the monetary penalty, MGM is required to implement a two-year compliance program, which will be conducted by an independent reviewer. That reviewer will be retained by the company and approved by the Attorney General’s Office. As part of the program, MGM will create a compliance committee that will include members of the legal, human resources, payroll and information technology departments and will review its policies and procedures annually. Human resources, payroll and legal staff will be trained on wage and hour compliance and the company will develop and establish a written policy for investigating wage and hour complaints raised by employees. Two independent, third-party audits will be performed with results sent to the Attorney General’s Office for review.
MGM Springfield opened the doors to its $960 million complex in the city’s South End in August 2018. Since opening, the casino has generated more than $1 billion in gross gaming revenue and hundreds of millions of dollars in tax revenue for the commonwealth. In its latest annual report, fiscal year 2022, the Massachusetts Gaming Commission noted MGM Springfield reported nearly $258 million in gross gaming revenue that generated $64.5 million in state taxes. In its most recent monthly revenue report, the MGC reported MGM Springfield took in $16.4 million at its slot machines, $1.1 million at its table games and more than $285,000 in taxable revenue from its sportsbook in September in spite of a systemwide cyberattack on MGM Resorts’ U.S.-based operations.