A US Department of Labor Wage and Hour Division investigation in September 2017 found that a Maryland assisted living facility company violated the Fair Labor Standards Act (FLSA).
The division found the company paid caregivers and technicians less than the federal minimum wage of $7.25 per hour, which is an FLSA violation. Some workers were paid a day rate of $65 per day for 12 hours of work, which is less than $5.42 per hour. Other employees were paid $80 a day for 12 hours of work, or less than $6.67 per hour. By doing so, the company also incurred overtime violations when employees worked more than 40 hours in a workweek.
In addition, investigators determined that when some employees worked overnight 24-hour shifts, they were paid only a day rate for 12 hours of work with the remaining 12 hours treated as unpaid sleep or leisure time. The company failed to provide adequate sleeping facilities to many employees, and required them to respond to residents’ needs during the sleep and frequently interrupted leisure time. This failure to pay workers for any of that time led to additional FLSA minimum wage and overtime violations.
The division found that the company was aware of its obligation to pay the required minimum wage and overtime premium but failed to do so. They also violated FLSA recordkeeping requirements by not maintaining adequate and accurate records of their employees.
Following the investigation, the department’s Office of the Solicitor in Philadelphia filed a lawsuit in October 2018 alleging the company had violated the FLSA minimum wage, overtime, and recordkeeping provisions.
On April 21, a consent judgment entered by the US District Court for the District of Maryland resolved nearly four years of extensive litigation.
The court’s final order requires the company to pay $466,642 and an equal amount in liquidated damages to the 27 current and former employees, as well as a $16,716 civil money penalty for the willful nature of the overtime violations. The court also enjoins the company permanently from violating the FLSA.
Wage and Hour Division District Director Nicholas Fiorello, in Baltimore, stated, “The significant amount of money due to just 27 employees indicates that these employees worked very long hours, often with little or no sleep at all during their shifts. Employers must not be allowed to profit by unfairly paying its workers, whose hard work and commitment make them successful. We remain steadfast in ensuring essential protections for essential workers, and providing clear, confidential compliance assistance to any worker or employer with questions.”
Compliance Perspective
Issue
The Fair Labor Standards Act must be followed by all employers. Employees with responsibility for determining rates of pay, deciding overtime pay eligibility, and performing recordkeeping of wages should be well trained in the FLSA provisions. All federal and state laws must be adhered to for the employee working overtime. Violations of the FLSA can result in fines and other penalties and sanctions.
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*
