Which wage order (public housekeeping vs. amusement/recreation) covers a private country club

DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF LABOR STANDARDS ENFORCEMENT
LEGAL SECTION
45 Fremont Street, Suite 3220
San Francisco, CA 94105
(415) 975-2060

MILES E. LOCKER, Acting Chief Counsel

July 29, 1998

Richard J. Bergstrom
Luce, Forward, Hamilton & Scripps
600 West Broadway, Suite 2600
San Diego, CA 92101

Re: Applicability of Wage Orders 5 and 10 to Private
Country Clubs

Dear Mr. Bergstrom:

Please accept my apologies for the delays in responding to
your prior correspondence seeking an opinion as to which
Industrial Welfare Commission ("IWC") wage order governs the
operations of a private country club that operates a restaurant
and golf and tennis facilities. According to the information you
have provided: (1) the club's facilities are generally only
available for use by its members and their guests, (2) the club
operates a restaurant and dining area, (3) the club hosts various
banquets and social events for its members and their guests, and
(4) the club maintains and operates an eighteen hole golf course
and tennis facilities.

The situation you have described presents us with a business
of a mixed nature, that is, a business with various operations
that seemingly fall within the coverage of two separate wage
orders. The analysis of which IWC order applies is fact driven,
and can only be decided on a case-by-case basis. Nonetheless,
there are certain general principles that guide this analysis.
Historically, the Division of Labor Standards ("DLSE") has
approached this issue by undertaking an assessment of the
principal purpose of the business, and then determining whether
an IWC industry order applies to that principal business purpose.
If so, the industry order would apply to all classifications of
employees, regardless of the work performed.

Richard J. Bergstrom
July 29, 1998
Page 2

Here, there are two industry orders - - Orders 5 and 10 - -
that arguably seem to pertain to certain aspects of the club's
operations. Order 5 governs the "public housekeeping industry",
a term that is defined as "any industry, business or
establishment which provides meals, housing, or maintenance
services whether operated as a primary business or when
incidental to other operations in an establishment not covered by
an industry order of the Commission." (IWC Order 5-98, para.
2(C), emphasis added.) Thus, if the restaurant and dining area
operated by the club constitutes the club's "primary business",
the club (and all its operations and employees) would fall within
coverage of Order 5. But if these facilities do not constitute
the club's "primary business", that is, if the restaurant and
dining area were "incidental" to the club's other operations,
then Order 5 would apply only if the club's other operations
(i.e., its golf and tennis facilities) were not covered by an
industry order.

This brings us to the question of whether these golf and
tennis facilities fall within the parameters of Order 10, an
industry order that governs the "amusement and recreation
industry." This term is defined as "any industry, business or
establishment operated for the purpose of furnishing
entertainment or recreation to the public, including but not
limited to theaters, dance halls, bowling alleys, billiard
parlors, skating rinks, riding academies, race tracks, amusement
parks, athletic fields, swimming pools, gymnasiums, golf courses,
tennis courts, carnivals, and wired music studios." (IWC Order
10-89, para. 2(C).) Your letter emphasizes the "private"
character of the country club, to wit, the fact that its
facilities are generally only available for members and their
guests. This then poses the question of whether such a "private
country club" is "operated for the purpose of furnishing
entertainment or recreation to the public", within the meaning of
Order 10. The answer to this question turns on the meaning of
the term "public" as used in the IWC Order.

We do not believe that the term "public" means that the
facility must be open for use by anyone and everyone. All of the
businesses covered by Order 10 may refuse admission to persons as
long as the refusal is not based on unlawful discriminatory
factors. A theater does not lose its "public" character, within
the meaning of Order 10, when it is sold out to all but season
ticket subscribers, or when high ticket prices discourage
attendance. A dance hall does not lose its "public" character by
enforcing a dress code that bars admission to those who do not
meet the doorman's approval. Likewise, we must conclude that a
so-called "private country club" does not lose its "public"

Richard J. Bergstrom
July 29, 1998
Page 3

character, within the meaning of Order 10, by charging membership
fees that preclude all but a small fraction of the public from
seeking membership, or by imposing other requirements designed to
limit membership (e.g., requiring applicants to be nominated for
membership or approved by a screening committee). In short,
although a "private country club" may limit its membership as it
sees fit, the individuals who belong to the club, and their
guests, are members of the "public" within the meaning of Order

10. Consequently, a private country club that operates and
    maintains a golf course and tennis courts will be subject to IWC
    Order 10 if these recreational facilities, rather than the club's
    dining facilities, comprise the club's primary business purpose.

As a general matter, it would seem that the principal
purpose of a country club is to provide its members with
opportunities to socialize while engaging in recreational
pursuits. As such, the club's golf and tennis facilities would
serve a more primary purpose than the dining facilities, which
provide an incidental convenience for members. But these
generalizations must, of course, give way to specific, detailed
facts. As indicated above, the determination of the principal
purpose of a mixed business is highly fact intensive. Such
determinations can only be made on a case-by-case basis. The
limited facts set out in your letter preclude us from making such
a determination. If you wish to have us proceed further, you may
consider having your client consent to an on-site inspection,
which would allow us to conduct a detailed assessment of the
business operations. Also, feel free to call me if you wish to
present more specific facts or have any other questions.

I hope this letter has provided the guidance that you are
seeking. Thank you for your interest in California wage and hour
law.

Yours truly,

MILES E. LOCKER
Acting Chief Counsel

cc: Jose Millan
Tom Grogan
Nance Steffen
Greg Rupp