Federal wage and hour authorities have trained health care employers in the southeastern United States to be on the lookout, and this oversight is expected to continue into the new year. Last year alone, the Department of Labor's Wage and Hour Division conducted nearly 400 investigations and recovered more than $4.1 million in unpaid wages and liquidated damages for more than 2,000 long-term care workers across the Southeast. What steps can be taken to ensure that such issues are avoided and wage and hour compliance is maintained in 2025?
simple background
The Wage and Hour Division continues to focus its efforts on investigating Fair Labor Standards Act (FLSA) violations in the health care industry, including residential care facilities, assisted living facilities, and home health care providers. The initiative targets violations nationwide, with a particular focus on healthcare employers in the southeastern United States.
Most recently, the Wage and Hour Division announced that it had recovered more than $114,000 in civil penalties in excess of unpaid wages and liquidated damages for fiscal year 2024. DOL's efforts include conducting presentations to educate employers and employees about wages and hours. We will discuss the laws and how they apply specifically to the healthcare industry. Recent press releases also highlight the misclassification of home care workers as independent contractors and unpaid overtime by assisted living facilities.
The amounts and enforcement efforts are significant and serve as a good reminder for employers to remain aware of their obligations under the FLSA. Specifically, health care employers in Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee said the initiative focused more on those states than others. Therefore, we must continue to be vigilant.
5 steps healthcare employers can take
To avoid becoming part of this initiative's wage recovery statistics, here are five things to do when evaluating your pay practices.
1. Verify that overtime hours are calculated correctly. Some of the most common violations uncovered by this effort were overtime and failure to pay the federal minimum wage. Under the FLSA, non-exempt workers must be paid 1.5 times their “regular wage” for all hours worked in excess of a 40-hour workweek. Although this seems like a no-brainer, medical employers often run into problems figuring out regular pay. This figure is calculated using the hourly wage paid to the employee, but also includes other forms of pay such as non-discretionary bonuses, shift differentials, on-call pay, seniority pay, hero pay, and hazard pay. Masu. These types of pay are often excluded and can lead to claims for unpaid overtime.
2. Check your independent contractor classification. Providing a 1099 and a contract stating that a worker is an independent contractor does not automatically make them an independent contractor. Both federal and state laws apply rigorous tests to determine appropriate classification, often focusing on the degree of independence of workers and the nature of the work they perform. . This is a major focus of this effort, a hotly contested issue for employers of nursing personnel, and one area of law that remains in flux over the past few administrations.
3. Understand the difference between exempt and non-exempt. Similarly, just because an employer designates an employee as overtime exempt does not mean that the employee is actually exempt, even if the employee consents to this classification. Regardless of job title or contract terms, employees must meet certain criteria to be exempt from overtime. Failure to properly classify employees as exempt or non-exempt can have lasting effects and increase legal risk. Therefore, it is important to regularly review the roles of all exempt employees to ensure that they are classified appropriately. This review should consider the job description and, more importantly, what the role actually entails on a typical working day. As part of this review, if you find that a type of employee is performing tasks outside of their current job description, you may want to update that description to more accurately reflect the roles and responsibilities of that job. Must be updated.
4. Always pay for activities that generate compensation. Generally, all time spent at work by non-exempt employees for the benefit of the employer is compensable. This includes time spent providing care, as well as time spent onboarding, training sessions and meetings, traveling during shifts, donning and doffing protective gear, and interrupted breaks. Ensure you know the hours worked by all non-exempt employees by providing training and ensuring managers have up-to-date information on proper time management for these types of workers.
5. Be prepared for a DOL investigation. The DOL is not required to notify employers of investigations in advance. The agency frequently launches unannounced site visits to observe normal business activities and request access to records. This requires employers to be prepared to quickly create payroll and time records, employee contact information, exemption classifications, job descriptions, 1099 forms, and other documents. You must ensure that these materials are completed and maintained so that they are readily available. DOL investigations can be time-consuming and disrupt normal operations. It is important to prepare in advance and let the site manager know what to do during the site visit. Additionally, the best way to prepare for this is to conduct regular and periodic internal reviews of employment records and policies to ensure compliance with the FLSA. An internal review must be conducted with the assistance of legal counsel and typically includes a review of exempt employee classification, independent contractor classification, payroll and work records, and compliance with leave laws.
