Resort pay policy attacked

David Strow

Wednesday, July 21, 1999 | 10:59 a.m.

The newly opened Resort at Summerlin faces a potential legal challenge over how it pays its casino employees.

In a letter sent to Seven Circle Resorts Inc. Chief Executive Brian McMullan, the Nevada Casino Dealers Association accused the Resort of violating state law "by subsidizing floor(person) pay with toke money." The Resort makes the policy a condition of employment, the letter said.

The association demanded that the Resort immediately stop the practice.

"It is evident to any reasonable person that by offering these employees a share of dealer's tips as part of their compensation you were able to hire them at a much lower wage than would otherwise be possible," said the letter, signed by association President Tony Badillo and Vice President Jack Lipsman. "Any action which might compromise an operator's gaming license would hurt everyone involved and should be avoided at all costs."

The Resort responded that it does not have a separate designation for floorpeople and dealers. Rather, the Resort hires "casino hosts," who move up in pay as they learn new games and skills. Employees who gain experience at a particular game are asked to supervise table games during some shifts, and deal during others. Jim Fonseca, senior vice president and chief operating officer of the Resort, said the company will not halt that policy.

"The rationale is, once you join the company, you have a clear career path ahead of you," Fonseca said. "You know what skills you need to progress."

The association says floorpeople at the Resort are paid a base wage of $80 per day, less than half the normal pay for the position. It alleges that floorpeople at the Resort receive a share of the dealer toke, or tip, pool as compensation, and that this practice enables the Resort to offer a far lower pay scale than other casinos.

"To me, it looks like they're trying to start something new," Badillo said. "They're trying to cut the payroll, and the first thing they looked into was dealer tips."

In a response letter issued to the association, Fonseca said "casino hosts" start at $7.75 per hour, or $62 per eight-hour shift, before tips. A staff member who completes all of the "skill blocks" receives $11.50 per hour, or $92 per day. By comparison, the average hourly rate for Strip dealers was $5.59, he said.

"It should be noted that no staff member of The Resort at Summerlin has raised your concern," Fonseca said.

The association, a nonunion entity, claims 4,600 members in Nevada. Resort employees do not have union representation.

Gail Maxwell, acting state labor commissioner, said the association's allegations, if accurate, would violate state law, and would trigger a Labor Commission investigation.

"Management can't be involved in pool tipping at all," Maxwell said. "If (employees) wanted to include (management), that's an agreement between tip earners only."

But Fonseca said the company has already consulted with its attorneys and feels it is in compliance with labor laws because its casino hosts are not considered management, even if they oversee games as part of their duties.

"You assume that we are paying certain individuals less and that therefore the Resort at Summerlin receives a benefit," Fonseca's letter said. "We have been advised by our Nevada legal counsel that in order for us to be deemed to receive a legal benefit from dealers' tips, we would have to keep some of the money in our tip pool for ourselves. ... One hundred percent of all tips received are disbursed to the staff members in the tip pool."

Still, the association is threatening to lodge a formal complaint with the Labor Commission if the practice doesn't end.

"This is a policy that looks like it could spread around, and we don't want that to happen," Lipsman said.