Federal Court Awards $35.8M in Back Wages Against Pennsylvania Healthcare Employers
According to the Department of Labor, this is one of the largest wage recovery judgments in history. A Pennsylvania federal court awarded $35.8 million in overtime back wages and liquidated damages to 6,000 current and former workers employed by the operators of 15 residential skilled nursing, rehabilitation, and assisted living facilities in western Pennsylvania that willfully denied them overtime pay.
The judgment was handed down after a 13-day bench trial. The defendants included 15 nursing facilities and their owner and CEO Samuel Halper and CHMS group, the payroll office that the defendants used to oversee and implement their illegal compensation practices. This action follows an investigation by the department’s Wage and Hour Division in Pittsburgh and litigation by its Office of the Solicitor in Philadelphia.
According to the wage and hour division of the Department of Labor, department investigators discovered that the employers violated the Fair Labor Standards Act (FLSA) for years by doing the following:
- willfully failing to pay their employees for all their hours worked including work done on lunch breaks.
- failing to incorporate all promised compensation, including nondiscretionary bonuses and shift differentials, when calculating overtime pay.
- avoiding paying overtime by incorrectly treating employees as exempt from the FLSA’s overtime requirements.
- failing to keep accurate records of hours worked and compensation due for those hours.
Employee misclassification lawsuits
Sometimes, employers will classify employees as independent contractors or executives to avoid paying overtime to their employees. This is known as wage theft and it’s illegal. The FLSA is a piece of federal legislation that protects workers from not receiving the overtime pay that they deserve.
In the aforementioned lawsuit, the defendants were accused of misclassifying their employees to avoid paying them overtime wages. The FLSA holds that some employees are exempt from overtime. These generally include salaried executives and independent contractors. In many cases, an employee who does work for a company will be classified as an independent contractor by the company to make the employee exempt from recovering overtime.
How do federal courts differentiate between an independent contractor and an employee of a company? The Department of Labor has explained that determining whether or not a worker is an employee (who is entitled to overtime wages) or an independent contractor (who is not) depends upon an evaluation of several factors. This includes the following:
- the opportunity for profit or loss depending on managerial skill
- how permanent the work relationship is between the worker and the employer
- the nature and degree of control the employer exerts over the worker
- the extent to which the worker uses their own equipment
- the extent to which the work performed is an integral part of the employer’s business
Talk to an FLSA lawyer today
The Tampa employment lawyers at Florin Gray represent the interests of employees who are not being paid their overtime wages in accordance with federal law. Call our office today to schedule an appointment and we could begin discussing how you could recover back wages and liquidated damages for your employer’s malfeasance.
Source:
dol.gov/newsroom/releases/whd/whd20240730
