A U.S. District Court in Pennsylvania has issued a consent order requiring the payment of more than $1.6 million in back wages and damages to 546 home health aides. The court also ordered payment of $20,000 in civil money penalties.
The home health agency misclassified the aides as independent contractors and failed to pay required overtime wages, in violation of the Fair Labor Standards Act (FLSA). Investigators determined that the home health agency violated the FLSA when it:
- Misclassified 546 home health aides as independent contractors instead of employees, and then failed to pay them overtime when they worked over 40 hours per week.
- Continued to pay some aides straight-time rates for overtime hours, even after it began to classify them correctly as employees.
- Failed to keep a record of the number of hours worked by office staff
The U.S. Department of Labor’s Wage and Hour Division conducted the investigation that led the court to order the home health agency to pay $812, 675 in back wages and an equal amount in liquidated damages to the affected home health aides. In addition, the court ordered the home health company to pay civil money penalties due to willful nature of the violations.
The Wage and Hour Division offers numerous resources to ensure employers have the tools they need to understand their responsibilities and to comply with federal laws. Their website can be accessed at: WHD | U.S. Department of Labor (dol.gov).
Issue:
Nursing facility staff responsible for payroll must ensure that all employees are paid accurately and receive what they are entitled. When software is used to calculate payroll, it is still essential that the facility checks the accuracy of each employee’s timecard to ensure that all laws are complied with each payroll period.
Discussion Points:
- Review policies and procedures for compensating employees accurately, including meeting overtime pay requirements. Update the policy as needed.
- Train all staff that have responsibility for payroll on the procedure that should be used for payroll. Document that these trainings occurred and file the signed document in the employee’s education file.
- Periodically audit to ensure that all employees received the compensation that they were entitled to during the payroll period.
