Despite a federal court judgment in 2022 requiring him to pay employees overtime, the owner of eight healthcare services companies in the Indianapolis area is accused by the US Department of Labor (DOL) of continuing to use improper pay practices. The DOL is now seeking a contempt order from the federal court, alleging that the employer has disregarded the 2022 decision.
In addition to requesting the court to hold the owner and his companies in contempt, the department’s complaint highlights ongoing overtime violations. According to the DOL’s Wage and Hour Division, more than 700 employees of the owner’s companies may have been underpaid from April 2020 to the present due to these practices. The exact number of employees affected is currently unclear.
Filed on July 10, 2024, in the US District Court for the Southern District of Indiana in Indianapolis, the department’s complaint states that the owner manipulated regular pay rates for employees who worked over 40 hours per week, paying them straight-time rates instead of required overtime wages. The complaint alleges that these practices began immediately after the conclusion of the previous investigative period.
The division’s investigation included a review of records from the owner’s current companies and three now-closed home healthcare agencies he operated. While the contempt petition targets the owner personally, the complaint implicates all companies examined by the division.
Given the extensive volume of pay records involved, the department has requested the court to mandate that the owner and his companies hire, at their expense, a third-party accountant to accurately calculate the owed back wages.
In 2021, the division investigated the owner and his companies for violations from April 30, 2019, through April 11, 2020. The department’s Office of the Solicitor obtained a consent judgment in January 2022 that prohibited future violations.
“The Department of Labor has asked the US District Court to hold [the owner] and his companies in contempt for violating the 2022 consent judgment he signed,” explained Regional Solicitor of Labor Christine Heri in Chicago. “When employers violate the FLSA’s pay requirements after resolving a case through a consent judgment, the department will seek to hold them accountable in court.”
Compliance Perspective
Issue
The Fair Labor Standards Act (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. 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. 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. Maintaining compliance with consent judgments is essential to avoid legal repercussions.
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.*
