MGM Springfield Settles Pay Violations for $6.8M, State to Collect Most of the Money

Posted on: October 27, 2023, 08:23h. 

Last updated on: October 27, 2023, 12:53h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

MGM Springfield has agreed to pay more than $6.8 million in the form of restitution and penalties to settle a multiyear investigation conducted by the Massachusetts Attorney General’s Office and its Fair Labor Division.

MGM Springfield Massachusetts attorney general
MGM Springfield workers, including housekeepers and casino floor employees, were shortchanged during the resort’s first year in operation, according to Massachusetts Attorney General Joy Campbell. MGM has agreed to settle the matter for more than $6.8 million. (Image: Boston Herald)

MGM Springfield opened in August 2018 at a cost of $960 million. During the casino resort’s first 18 months in business, state officials determined that the property operated by MGM Resorts International violated employee compensation statutes.

After fielding numerous complaints during the August 2018 through December 2019 time period, Massachusetts Attorney General Joy Campbell’s office launched an investigation. The probe concluded that MGM Springfield management failed to pay tipped employees the state’s hourly minimum wage, failed to pay overtime wages, unlawfully retained tips, failed to make timely payments, and failed to provide paid sick time to qualified staffers.

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. “My office will continue to hold accountable those who violate our wage and hour laws.”

MGM Springfield admitted no guilt in the settlement but agreed to pay $6,839,287.36 in restitution and state fines. The backpay and benefits will be distributed to impacted workers, whose claims reportedly range from $50 to more than $18K.

State to Receive Bulk of Funds

The settlement terms require MGM Springfield to make impacted employees whole within 30 days of the settlement consent, which was dated October 25.

The attorney general’s office calculated the back pay at $461,587.36. The funds will be distributed via direct deposit, less standard withholdings and deductions, for workers who remain with the company. Former employees impacted will receive mailed checks. Both groups are to be notified by MGM that the payments are the result of a settlement with the state attorney general.

“We take our compliance obligations seriously and have made proactive updates since 2019 to address this issue,” said MGM Resorts International Corporate Communications Director Dara Cohen. “We will continue to invest in training and regular reviews of our policies and procedures to ensure ongoing compliance.”

The rest of the settlement money, $6,377,700, will be paid within 30 days to the commonwealth via the attorney general’s office. Some of the money will fund a state-appointed independent compliance monitor who will regularly train MGM Springfield management on wage and hourly compliance. Two annual wage and hour audits will also be conducted by a third party, with those findings submitted to the state attorney general’s office.

Widespread Issue

Campbell’s office said its investigation found MGM Springfield’s pay violations stemmed across the resort. The 2,036 impacted workers were employed in various functions, including table game dealers, casino floor attendants, banquet servers, bartenders, ushers, kitchen staff, housekeepers, and security.

The state probe uncovered management participating in waitstaff tip-pooling, underpaying hourly workers for overtime hours, and requiring security guards to work through their meal breaks. Though tip-pooling isn’t illegal in Massachusetts, the state’s law on the practice requires only the hourly workers who directly generate the tips be allowed to share in the proceeds, not managers.