A federal investigation has recovered $133,661 in back wages for 63 workers of a Dayton home healthcare provider who misclassified its employees as independent contractors, denied workers overtime pay, and falsified payroll records to hide the violations.
The US Department of Labor’s Wage and Hour Division determined the provider and its owner misclassified office staff and home health aides as independent contractors. The employer then paid workers straight time for hours over 40 in a workweek, a violation of federal law. The division’s investigation disclosed the firm falsified their payroll records in an attempt to hide their violations of the Fair Labor Standards Act.
Based in Dayton, the company provides skilled nursing care, physical and occupational therapy, home healthcare, and speech therapy services. The company also operates offices in Columbus and Cincinnati.
Issue:
A worker is entitled to minimum wage and overtime pay protections under the Fair Labor Standards Act (FLSA) when there is an employment relationship between the worker and an employer and there is coverage under the FLSA. The FLSA requires that, among other things, covered employers pay their nonexempt employees at least the federal minimum wage for every hour worked and overtime pay for every hour worked over 40 in a workweek, and it mandates that employers keep certain records regarding their employees. It is essential that individuals who determine workers’ classifications are knowledgeable about the differences between employees and independent contractors. 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. Determine if your policies clearly state the differences between an independent contractor and an employee. Update your policies as needed.
- Provide training for staff who have responsibility for ensuring accuracy of overtime pay and recordkeeping, and ensure they demonstrate competence with the requirements of your policy and procedures and the FLSA, including the difference between an employee and an independent contractor. 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 correctly.
