On February 2, 2023, the US Department of Labor (DOL) announced that it obtained a consent judgment ordering a Philadelphia-area agency and its owners to pay 398 home healthcare workers more than $2.3 million. A federal investigation had found the employer willfully shortchanged employees’ overtime wages.
Following an investigation by the department’s Wage and Hour Division and litigation by its Office of the Solicitor, the US District Court for the Eastern District of Pennsylvania entered a judgment requiring the agency and its owners to pay $1,176,883 in back wages and an equal amount in liquidated damages to the home healthcare workers.
Division investigators determined that the company paid straight time for overtime hours worked, paid an arbitrary rate less than the time-and-a-half overtime rate required by law for hours over 40 in a workweek, or used a combination of the two illegal pay practices. They also found the employer did not separate straight-time hours worked from overtime hours and failed to record the proper hourly rates in overtime work weeks accurately. These actions violated the overtime and recordkeeping provisions of the Fair Labor Standards Act.
In addition to paying back wages and damages, the agency must also pay a $219,099 civil money penalty assessed by the division for the willful nature of the violations.
Solicitor of Labor Seema Nanda said, “When employers willfully disregard the law and deny employees’ wages, we will hold them legally accountable, including by seeking civil money penalties.”
Compliance Perspective
Issue
The FLSA sets minimum wage, overtime pay, recordkeeping, and youth employment standards for employment subject to its provisions. Unless exempt, covered employees must be paid at least the minimum wage and not less than one and one-half times their regular rates of pay for overtime hours worked. Every covered employer must keep certain records for each non-exempt worker. The Act requires no particular form for the records, but does require that the records include certain identifying information about the employee and data about the hours worked and the wages earned. The law requires this information to be accurate. Misclassification of an employee’s status can lead to violations of the FLSA which 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 with responsibility for determining fair wages, overtime pay eligibility, and recordkeeping 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 compliance with minimum wage laws, and 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.*
