A New York Attorney General announced an agreement with a healthcare company in Albany, New York, for unlawfully including a repayment fee provision in their employment contracts for nurses recruited from foreign nations. The repayment provision threatened the nurses following their resignation or termination, most of whom were from the Philippines, with legal action and involvement of immigration authorities if they did not make the payments.
Since January 2011, the healthcare company collected $82,000 in “repayment fees” from formerly employed nurses because they did not fulfill their three-year commitment. The repayment provision discouraged workers from terminating their employment early, even if the conditions of employment were deplorable, or if they found employment with better wages or conditions elsewhere. The Office of the Attorney General (OAG) found that this policy was unlawfully enforced against seven nurses in the past 10 years, while hundreds of nurses were subjected to the unlawful policy during their permanent visa recruitment process or during their employment with the healthcare company.
Under the agreement, the New York healthcare company will return $90,229 to seven former nurses who were each forced to pay up to $20,000 if they resigned or were fired within three years of initial employment. The health care company will pay $82,000 to the workers and $8,229 more in interest. In addition to removing the repayment provision from all employment contracts, the healthcare company must notify current and former nurses of the clause’s removal and submit written reports on the compliance to the OAG.
In addition to the restitution, the healthcare company has agreed to additional terms to ensure fair treatment of its workers, including:
- Removing the repayment provision from all current and future employment contracts;
- Notifying all current and former nurses who have been a party to this agreement within the past six years that this clause has been removed and will not be enforced;
- Submitting a sworn affidavit to the OAG attesting that it has not collected the repayment fees from any nurse through any means, other than the seven nurses it has already admitted to; and
- Reporting requested documents and information to the OAG, including:
- Copies of the draft notices which will be sent to all current and former nurses;
- Lists of all current and formerly employed nurses who have received the notice, as well as their signed acknowledgments;
- Any responses or complaints received by current or former nurses in response to the notice of removal; and
- Written confirmation within one year that the unlawful repayment provision has not be reintroduced to any employment contracts
A New York attorney issued a subpoena in February 2020 after the matter was referred to her office by the New York State Nurses Association (NYSNA). The healthcare company was found to have violated the Trafficking Victims Protection Act § 1589 through its provision, which constitutes a threat of sufficiently serious legal and financial harm “to compel a reasonable person of the same background and in the same circumstances to perform or to continue performing labor or services in order to avoid incurring that harm.”
Compliance Perspective
Issue
Presently most nursing facilities are facing a nursing shortage across the country. If a nursing facility does utilize an employment contract, it is highly recommended that all employment contracts be reviewed by an attorney who is knowledgeable in the Fair Labor Standards Act and the Trafficking Victims Protection Act. A violation of the Federal Trafficking Victims Protection Act can be punishable by fines and imprisonment.
Discussion Points
- Review your policies and procedures for employment contracts, if applicable. Ensure that your policy has incorporated the Fair Labor Standards Act and the Trafficking Victims Protection Act requirements. Update your policies as needed.
- Train all staff on your policies and procedures for employment contracts. Also provide training to applicable employees on the Fair Labor Standards Act and the Trafficking Victims Protection Act. Document that these training occurred and file each signed document in employee’s individual education file.
- Periodically audit your hiring protocols and employment contracts to ensure that the Fair Labor Standards Act or the Trafficking Victims Act are not violated.
FOR MORE INFORMATION ON THIS TOPIC VIEW: HUMAN TRAFFICKING.
