Nursing chain settles alleged breaks and bonus pay violations for $2.9 million

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Diving brief:

  • Petersen Health Care, Inc. of Peoria has agreed to pay $2,939,576 in back wages to 3,024 caregivers at 84 facilities for allegedly violating the Fair Labor Standards Act, the U.S. Department of Labor announced May 24.
  • The company operates residential nursing facilities in Illinois, Indiana, Iowa and Missouri, according to the DOL announcement. Investigators from the DOL Wage and Hour Division found that the company did not pay wages for meal periods of less than 20 minutes and did not add bonuses and other incentives to the hourly rate of workers. caregivers when calculating overtime, the agency said. As a result, Petersen Health Care “incorrectly assumed that the affected workers were not entitled to overtime pay,” the DOL said.
  • Petersen Health Care “does not agree with any assertions or assumptions the Department made in determining their conclusions,” the company told HR Dive in an email. But “the current economic environment has dictated the rules,” he writes. “Petersen Health Care pays, and has always paid, its employees fairly and equitably for all time worked,” the email reads. “We regularly review and evaluate our pay practices to ensure that our hard-working employees are fairly and equitably compensated for all the time spent caring for our seniors in need.”

Overview of the dive:

The DOL has been aggressive in pursuing alleged overtime violations, and its investigations have led to heavy fines against employers. For example, the agency recently recovered $181,379 in back wages for 235 workers at two Birmingham, Alabama delivery companies that contract with FedEx, the DOL announced May 25.

Investigators found that delivery companies were incorrectly classifying workers as exempt from overtime pay, the agency said. Companies have misapplied an FLSA exemption from overtime requirements when workers’ duties involve driving on interstate highways or operating delivery trucks weighing at least 10,000 pounds, or when working for a employer who falls under the regulations governed by the United States Department of Transportation, according to the DOL.

The DOL also recently recovered $33,399 in back wages and damages for 14 Hawaii tour operator crew members after investigators found the employer was paying workers partial overtime at the rate time-and-a-half correct, but was paying the rest of the overtime pay at right-hourly rates, according to a May 26 announcement. The employer then incorrectly listed the normal-time payments as bonuses, the DOL said.

Given low employment rates, “employers who fail to meet their legal obligations to their workers are in competition with employers who pay workers their rightful wages,” said WHD District Manager Terence Trotter. , in the May 26 announcement. “[E]Employers whose pay practices violate the law will have a hard time filling vacancies with the people needed to do the work that makes their company successful,” Trotter said.

Some FLSA regulations are fairly straightforward, such as the requirements governing meal and break compensation, explained by the DOL in Fact Sheet #22. But other compliance issues can get complicated, such as knowing when include bonuses and other incentives in calculating overtime, which the DOL explains in Fact Sheet #56C.

The misclassification of workers is another red flag from the DOL. In one example, a medical staffing firm was ordered to pay more than $7.2 million in back wages and damages to 1,105 workers it intentionally misclassified as self-employed, the agency announced in January.

Performing a comprehensive wage and hour audit can help ensure compliance with wage and hour laws, one labor attorney wrote in a recent article for HR Dive. There are two types of audits: precautionary audits that the employer conducts internally, and more ominous audits ordered and conducted by a government agency, the lawyer said.

An agency’s decision to conduct an audit is usually not random, the lawyer pointed out. Instead, an agency like the DOL chooses to investigate a company’s wage and hour practices after being tipped to do so, or when the company has already been audited and cited violations.

Audits typically involve four elements: 1) a “thorough analysis” of how employee time is recorded, including the accuracy of the time recording system and whether all non-exempt employee compensable worked time is captured; 2) company wage and hour policies; 3) if the employees are correctly classified; and 4) other miscellaneous items, such as whether previously identified violations have been corrected.

Preparation is key and companies should consult experienced legal counsel, the lawyer said.

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