The US Department of Labor (DOL) announced on January 10, 2023, that it had obtained a consent judgment ordering a Pennsylvania home healthcare agency to pay more than $3.8 million in back wages and liquidated damages. According to the DOL, the agency had intentionally denied 433 employees full overtime wages.
The judgment requires the home healthcare agency and its owner to pay $1,930,761 in back wages, an equal amount in liquidated damages, and a civil money penalty of $180,141 for the willful nature of its violations. The department originally filed its complaint on Sept. 2, 2020.
“This is a significant recovery of back wages and liquidated damages for people who typically work for low wages and often struggle to make ends meet,” said Principal Deputy Wage and Hour Administrator Jessica Looman. “Employers must understand that federal law requires them to respect workers’ rights to be paid all of their earned wages, and that we will investigate those who fail to meet their obligations.”
The litigation and judgment was prompted by an investigation by the department’s Wage and Hour Division that found the agency paid direct care employees a regular rate ranging from $7.25 to $14 per hour. To avoid the expense of paying employees proper overtime, the employers lowered their regular rates when employees worked over 40 hours in a workweek, and paid overtime compensation based on those rates. By lowering the rates, the employer concealed the fact that they paid all hours as straight time in violation of the Fair Labor Standards Act.
The division also determined the employers paid some administrative employees straight time when overtime pay was required, failed to pay direct care workers for travel time between client homes, and did not keep records as required.
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.*
