Common Wage Schemes Used in the Health Care Industry: Millions Stolen From Healthcare Workers Each Year
Employers in the healthcare industry are known for committing wage theft. The DOL has classified the healthcare industry as “low wage, high violation” and collected $14 Million in stolen healthcare worker wages for healthcare employees in 2021 alone. Hospitals and healthcare providers are under enormous budgetary pressure to cut costs in order to increase profits: wage theft is how the healthcare pads its bottom line.
Healthcare Wage Theft Victims Can Recover Double Damages
In a wage theft lawsuit, employers face the prospect of paying both back wages AND liquidated damages (up to 100% of the amount of back wages) and the employees’ attorney’s fees and costs. When available, the “double damages” add up, and make pursing an FLSA claim an appropriate avenue to recover stolen wages for those working in the healthcare field.
The federal government has been very active in investigating healthcare employers for wage and hour compliance under the Fair Labor Standards Act (FLSA). The U.S. Department of Labor’s Wage and Hour Division has targeted healthcare as a “high violation industry,” and in 2021 conducted 1,194 investigations of healthcare employers. Following an investigation, the Department of Labor can file a lawsuit in federal court if an employer does not agree to pay the back wages and liquidated damages demanded.
COMMON HEALTHCARE WAGE THEFT SCHEMES
- Failure to Pay Minimum Wage and Overtime
Healthcare employers improperly treat workers as “white-collar” workers in order to avoid paying overtime. Nurses and other healthcare providers often work long weeks, accumulating over 40 hours for a workweek, and are improperly paid straight pay without overtime. Registered nurses may not be exempt based on the work duties that they normally perform. Overtime lawsuits can be filed on behalf of healthcare workers seeking to recoup overtime wages which should have been paid.
- Misclassification of employees as independent contractors
Treating an employee as an independent contractor is a common method of wage theft. The issuance of an IRS 1099 form to an employee does not determine, in and of itself, that an employee is an independent contractor. The FLSA has an expansive definition of who is an employee. Certain states (like Massachusetts and California) use the broad “ABC Test” to determine whether or not a worker is an “employee.” Government investigators and the courts will closely analyze each worker’s conditions of employment to evaluate whether they are truly independent or are employees under the control of the employer. Wage Theft Lawsuits for misclassifying nurses, nurses aids, and other healthcare providers are common.
- “Rounding” Time to Steal Wages
Unfortunately, it is a fairly common practice for employers to round employee time entries to the nearest five minutes, tenth of an hour, or quarter of an hour. Of course, the employers always round down, not up, for their own benefit. The effect of this “rounding” can be thousands of dollars taken from employee pay checks. The Department of Labor takes the position that the effect of the rounding must be neutral and not result in employees being prevented from receiving compensation for all time worked when looked at over a period of time. If the “rounding” has affected your pay check, you have a wage and hour claim.
- Failure to Pay Travel Time
Many healthcare employers have employees who travel to multiple locations as part of their work duties. They go from one medical facility to another, or visiting patients at home. Travel from one work location to another during the workday is typically considered a compensable work activity, meaning that employers must pay for this time and count it as work hours for determining the employee’s eligibility for overtime pay. Nurse wage theft lawsuits are frequently filed by nurses who are required to travel during the day from facility to facility but are not compensated. Nurse travel time should be compensated.
- Interrupting or Not Allowing Meal Breaks
Wage theft lawsuits for meal breaks are also common: Healthcare workers are frequently required to work during their unpaid meal or other breaks. Employers can be found responsible for employee work performed during unpaid breaks if it knew or should have known that employees were performing the work. Usually, the employer has knowledge that an employee is working during his or her break because the employer has ordered that employee to do so.
- Failure to Pay for on-call time
An employer may be required to compensate employees for the time that they are on call, depending on how free the employees are to use the on-call time. If an employer requires an employee to remain on its premises, or requires that an employee remain on call such that the employee cannot use the time for the employee’s own purposes, the on-call time will be considered compensable work time.
- Not including all required earnings in the “regular rate” for the calculation of the overtime premium
Employees in the healthcare industry are often compensated with a variety of bonuses such as shift differentials, supplemental shift bonuses, and retention bonuses. Healthcare employers must include the payment of these bonuses in the regular rate of pay used to calculate overtime pay. Healthcare employers can be liable for a substantial amount of back wages where bonuses were improperly left out of the regular rate of pay.