Pennsylvania Home Care Agency to Pay $1.4M in Back Wages, Damages, to 218 Workers

A Pennsylvania home care agency neglected to pay its 218 workers overtime wages and then manipulated records to hide the wage theft. Following an investigation by the US Department of Labor’s Wage and Hour Division in Pittsburgh, and litigation by the Regional Solicitor’s Office in Philadelphia, the department obtained a consent judgment requiring the home care company and its owner to pay more than $1.4 million in back wages and liquidated damages to the affected employees. 

Investigators determined the employer paid workers a straight-time hourly rate instead of one-and-one-half their required rate for hours over 40 in a workweek. They also found the agency attempted to mask the wage theft by representing straight-time pay as overtime when overtime wages were required. The company also failed to include recruitment commissions and hourly coronavirus hazard pay in employees’ required rates of pay when calculating overtime. All of these actions violate the Fair Labor Standards Act. 

The consent judgement requires the company and its owner to pay $719,962 in back wages and an equal amount in liquidated damages. 

“Wage theft is an all-too-common concern in the healthcare industry, and we are determined to use our resources to hold employers who violate federal labor laws accountable to the fullest extent,” said Solicitor of Labor Seema Nanda. “By recovering wages and liquidated damages, when appropriate, for workers we send a clear message to employers in all industries that consequences can be costly for employers who flout the law.”  

In addition to back wages and damages, the division assessed $85,075 in civil money penalties given the willful nature of the employers’ FLSA violations. 

Issue: 

The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in federal, state, and local governments. Covered nonexempt employees must receive overtime pay for hours worked over 40 per workweek (any fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods) at a rate not less than one and one-half times the regular rate of pay. Violations of the FLSA can result in fines and other penalties. 

Discussion Points: 

• Review your policies and procedures on fair wages, overtime pay eligibility, and recordkeeping. Update if needed. 
• Train all staff on their responsibility to accurately report their hours worked. Provide specific 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. 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.