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Custer State Park resort appealing federal penalties

CUSTER (AP) -- Custer State Park Resort in western South Dakota's Black Hills is appealing $65,000 in penalties assessed by the federal Labor Department for alleged exploitation of foreign workers.

The Labor Department announced this week that it had assessed the penalties and ordered the resort that operates lodges within the state park to pay $93,000 in back wages to 72 workers. Workers were illegally required to pay fees to get jobs and some were not paid overtime, the agency said.

Resort director Josh Schmaltz said in a statement that it did not willingly exploit temporary workers from Indonesia and the Philippines. The resort also paid back wages that the Labor Department determined was owed to those employees, he said.

"Custer State Park Resort continues to monitor and audit its wage and hour practices to ensure that all of its workers -- whether foreign or American -- are paid fairly and in compliance with the law," Schmaltz said.

Schmaltz said the resort had been told by the Labor Department that it was exempt from overtime rules. He also said the resort had no knowledge that a worker recruitment agency it had worked with was charging prospective workers impermissible fees of up to $1,500. The resort has since stopped using the employment agency, he said.

Labor Department spokesman Scott Allen said the resort is liable for the actions of its contractor, and that the information about overtime rules that was given to the resort did not apply to the foreign workers. Allen said the agency did not face any sanctions.