An Illinois-based management company must pay $2,939,576 in back overtime wages to 3,024 caregivers at 84 nursing homes across three Midwestern states to resolve violations found in a US Department of Labor (DOL) investigation.
The DOL’s Wage and Hour Division found that the company failed to pay the correct overtime because the employer wrongly assumed the affected workers were not entitled to overtime pay. They failed to pay wages for meal periods of less than 20 minutes, did not add bonuses and other incentive pay to workers’ hourly rate when calculating overtime pay, and failed to maintain accurate records of work hours. These actions violated the Fair Labor Standards Act (FLSA).
In addition to agreeing to pay the overtime back wages, the company’s primary owner and CEO signed an enhanced compliance agreement with the Department to comply with the FLSA in the future.
The Wage and Hour Division found that this company has systematically violated wage and hour laws on numerous occasions in as many as 30 investigations in the last two decades. In 2009, a consent judgment was executed ordering the company to pay $42,000 and to comply with the FLSA. In the last six years, the division found back wages of $88,000 due in seven investigations that incorporated findings at several other locations.
From 2019 to 2021, Wage and Hour Division investigations recovered more than $22.7 million for Midwest healthcare workers as a result of violations of worker protections under the FLSA.
Compliance Perspective
Issue
The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in federal, state, and local governments. Covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. In some states, the minimum wage requirements may be higher, so know your specific state’s laws. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek. Hours worked ordinarily include all the time during which an employee is required to be on the employer’s premises, on duty, or at a prescribed workplace. Violations of the FLSA can result in fines and other penalties.
Discussion Points
- Review your policies and procedures on fair wages, overtime pay eligibility, and recordkeeping. Update if needed.
- Train all staff on their responsibility to accurately report their hours worked. Provide specific training for staff who have responsibility for ensuring accuracy of overtime pay and recordkeeping, and ensure they demonstrate competence with the requirements of your policy and procedures and the FLSA. Document that these trainings occurred, and file each signed document in the employee’s education file.
- Periodically audit to ensure that overtime pay eligibility and recordkeeping are accurate and being reported correctly.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
