On August 6, 2024, the US Department of Labor (DOL) announced a federal consent judgment against a Philadelphia-based home care services provider. This judgment requires the company to pay $129,697 in back wages and damages to 66 home health aides after investigations and legal proceedings revealed that the employer willfully denied them overtime pay.
The US District Court for the Eastern District of Pennsylvania has mandated that the provider compensate the affected employees—who work at the company’s Philadelphia and Dover, Delaware locations—for back wages and liquidated damages. Additionally, the court has imposed a $49,434 civil money penalty on the provider for the violations. Prior to this judgment, the employer had already paid $100,000 in back wages to the same workers.
The DOL’s Office of the Solicitor in Philadelphia initiated the lawsuit in December 2023. Following several months of litigation, the provider agreed to the consent judgment, which includes payment of the remaining owed amount and the civil money penalty.
This court action came after the DOL’s Wage and Hour Division conducted investigations, and the Office of the Solicitor pursued legal action, confirming that the provider had only paid straight-time wages, including for overtime hours worked, in violation of the Fair Labor Standards Act (FLSA). The company president admitted to negotiating with employees to pay an additional $1 to $1.50 per hour, rather than paying legally required overtime.
“The US Department of Labor will not hesitate to litigate against an employer in federal court to recover unpaid wages and liquidated damages they’re owed and to protect their rights and protections under the Fair Labor Standards Act,” said Regional Solicitor Samantha Thomas in Philadelphia. “The outcome in this case shows employers face costly consequences for violations of federal overtime pay requirements.”
Compliance Perspective
Issue
The FLSA mandates that most employees in the United States receive at least the federal minimum wage for all hours worked, as well as overtime pay at a rate of not less than one and one-half times their regular rate for hours worked beyond 40 in a workweek. Unless exempt, covered employees are entitled to receive at least the minimum wage and overtime pay calculated at one and one-half times their regular rate for any overtime hours. Overtime pay is determined based on the employee’s regular rate of pay and the total number of hours worked in a workweek. Regardless of whether earnings are calculated on a piece-rate, salary, commission, or other basis, the required overtime pay must be computed using the average hourly rate derived from the total earnings. This is done by dividing the total pay for the workweek (excluding statutory exceptions) by the total hours worked to determine the regular rate. The regular rate of pay is based upon actual facts and cannot be circumvented by an agreement.
Discussion Points
- Review your policies and procedures on fair wages and overtime pay eligibility. Update if needed.
- Train all staff with responsibility for determining fair wages and overtime pay eligibility so that they are knowledgeable about your policies and procedures to ensure they comply with federal and state requirements. 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 and paid correctly. Audit employees for understanding in how they can report any concerns to their supervisor or through the hotline, including anonymously.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
