The US District Court for the Middle District of Pennsylvania recently approved a consent judgment ordering two Pennsylvania nursing homes to pay a total of $256,684 in back wages and an equal amount in liquidated damages to 231 nursing staff for FLSA violations found during a federal review of the employers’ pay practices.
The consent judgment resolves the complaint filed by the US Department of Labor alleging overtime and recordkeeping violations. During the course of the litigation the employers consented to a judgment requiring them to pay a total of $513,368 to the affected employees. The litigation and judgment followed an investigation by the department’s Wage and Hour Division that revealed the two facilities engaged in pay practices that violated the Fair Labor Standards Act.
Specifically, the employers paid non-discretionary bonuses to nursing staff but failed to include the incentives in their rate of pay when calculating overtime rates. The employers paid the bonuses for working particular shifts, picking up extra shifts, and providing needed support during the pandemic. The investigation also revealed that the employers failed to maintain proper records of hours worked.
“Our investigation found a common and costly error employers make, the failure to include non-discretionary bonuses in an employee’s regular rate of pay when calculating overtime rates,” explained Wage and Hour District Director Alfonso Gristina in Wilkes-Barre, Pennsylvania. “The Wage and Hour Division encourages employers to use the online tools and assistance we offer to avoid compliance issues, and reminds workers that they can contact us with questions about their wages and rates of pay.”
In addition to approving the consent judgment and ordering payment of $513,368, the court enjoined the employers from future FLSA violations.
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. Nondiscretionary bonuses are included in the regular rate of pay, unless they qualify as excludable under another statutory provision. 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, bonuses, and recordkeeping are accurate and are 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.*
