The US Department of Labor announced on February 17, 2023, that a federal court had entered a default judgment against a Pennsylvania home health provider and its owner, after an investigation by the Department’s Wage and Hour Division found the employer denied 23 home health aides overtime wages.
On Jan. 9, 2023, the US District Court for the Western District of Pennsylvania ordered the provider and its owner to pay $142,634 in overtime back wages and an equal amount in liquidated damages following litigation by the Department. Additionally, the judgment permanently forbids the employer from violating the Fair Labor Standards Act (FLSA) in the future.
The action came after the Division’s investigation determined that the employers did not pay the required overtime premium to the affected employees for hours worked over 40 hours in a workweek. Instead, employees were paid straight-time hourly rates for overtime hours worked. While the employer occasionally paid some workers the overtime premium, they capped the number of hours for which the employees could earn overtime wages, and then reverted back to paying straight-time hourly rates for hours worked over the cap. These actions willfully violated the FLSA and led the Department to assess a $21,528 civil money penalty that the employer paid.
In August 2022, the Department’s Office of the Solicitor filed a complaint alleging the FLSA violations. After the employer failed to respond to the complaint in a timely manner, the Department asked the court to enter a default judgment and expedite recovery of wages and damages. The court rejected the employer’s motion to dismiss the complaint and granted the default judgment.
“The US Department of Labor will not hesitate to litigate against an employer in federal district court to recover unpaid wages and liquidated damages owed to workers under the Fair Labor Standards Act,” said Deputy Regional Solicitor Samantha Thomas in Philadelphia. “This case shows healthcare industry employers that noncompliance with federal law can lead to legal consequences.”
Compliance Perspective
Issue
The FLSA does not limit either the number of hours in a day or the number of days in a week that an employer may require an employee to work, as long as the employee is at least 16 years old. Similarly, it does not limit the number of hours of overtime that may be scheduled. However, the FLSA requires employers to pay covered employees not less than one and one half times their regular rate of pay for all hours worked in excess of 40 in a workweek, unless the employees are otherwise exempt. It is a violation of federal laws for business operators to cap the number of hours for which an employee can be paid overtime.
Discussion Points
- Review your policies and procedures on fair wages, overtime pay eligibility, and recordkeeping to ensure they comply with federal and state requirements. Update your policies as needed.
- Train all staff who have responsibility for ensuring fair wages, overtime pay eligibility, and recordkeeping about your policy and procedures, and ensure they demonstrate competence with the requirements. Document that these trainings occurred, and file each signed document in the employee’s education file.
- Periodically audit to ensure that overtime pay eligibility and recordkeeping are accurate and being reported and paid correctly. Audit employees for understanding in how they can report any concerns to their supervisor or through the hotline, including anonymously.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
