The US Department of Labor has obtained a consent judgment requiring a Pennsylvania home healthcare agency and its owner to pay $810,320 in back wages and liquidated damages to 196 employees. The judgment comes after the agency repeatedly failed to pay employees the proper overtime rates, willfully violating federal wage laws.
The consent judgment, filed in the US District Court for the Eastern District of Pennsylvania in Philadelphia, follows an investigation by the Department’s Wage and Hour Division. The investigation uncovered that the agency consistently violated the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA).
Specifically, the agency paid employees separately for each client they worked with, failing to combine hours worked for multiple clients in a single week when calculating overtime. As a result, employees were only paid overtime after exceeding 40 hours with each client, rather than for all hours worked across clients. The investigation also revealed that employees often recorded more hours than they were paid and were not compensated for travel time between clients. Furthermore, the employer failed to keep accurate records of hours worked, including travel time.
In addition to the back wages and liquidated damages, the consent judgment requires the home healthcare agency to pay a civil money penalty, assessed by the Department of Labor, due to the willfulness of the violations.
Compliance Perspective
Issue
The Fair Labor standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards for covered employment. Unless exempt, employees must be paid at least the federal minimum wage and at least one and one-half times their regular rate for overtime hours worked. Hours worked include all time during which an employee is required to be on the employer’s premises, on duty, or at a prescribed workplace. Employers are also required to maintain accurate records for each non-exempt employee, including identifying information, hours worked, and wages earned. It is essential that this information is accurate and up to date to remain in compliance with the law.
Discussion Points
- Regularly review and update your policies and procedures on fair wages, overtime pay eligibility, and recordkeeping to ensure they align with both federal and state regulations. Some states have stricter standards than federal law, so make sure your policies are comprehensive. Include clear guidelines on how overtime is calculated, how to handle multi-location work, and how bonuses and shift differentials are factored into pay calculations. Ensure these policies are well-documented, easily accessible to staff, and clearly communicated.
- Provide training for staff responsible for determining fair wages, overtime pay eligibility, and recordkeeping. Training should cover accurate time tracking, overtime calculations, and the requirements for maintaining proper records. Conduct training regularly (e.g., annually) or whenever there are significant changes in the law or company policies. Document all training sessions and keep signed documents in each employee’s education file to verify that training has taken place.
- Conduct periodic audits to ensure compliance with minimum wage laws, verify that overtime pay eligibility is properly applied, and confirm that recordkeeping practices are accurate and up to date. Keep thorough documentation of the audit results, including any corrective actions taken to address issues identified during the audit.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*
