Ensure your practice matches policy
by Angelo Spinola and Pierre-Joseph Noebes
January 30, 2019

Wage and hour litigation has plagued the home health care industry in recent years.

Since Oct. 1, 2015, more than 540 federal court actions alleging Fair Labor Standards Act (FLSA) violations have been brought against homecare companies. While not separately tracked, state court filings are typically more than double the number of federal court actions. This means that approximately 1,600 wage-hour lawsuits have been filed against homecare companies in the last three years.

One of the biggest challenges with wage-hour compliance is effectively tracking and recording the working time of remote employees.

Failure to precisely and accurately track all working time can lead to costly class-action lawsuits and Department of Labor (DOL) investigations. Unfortunately, all too often companies acting with the best intentions of following the letter of the law find themselves defending their practices to a judge or DOL investigator.

Notably, two of the most commonly litigated issues for homecare companies relate to their policies and procedures for recording and paying caregiver time spent traveling and providing meal and rest periods. For many, defending these practices is made even more difficult by not documenting their efforts to comply with the FLSA.

Commonly Challenged Wage and Hour Practices

Travel Time

Homecare companies must pay nonexempt employees for “all hours worked,” which means any time spent on activities that are predominately for the company’s benefit is compensable. Generally, homecare companies must pay caregivers for all time spent traveling within the day as part of their normal duties other than the first and last commute of the day.

Unfortunately, a common error with the treatment of travel time is the employer’s decision to substitute mileage reimbursement for paying actual compensable travel time.

Another pitfall is a variation of the general rule for travel time known as the “continuous workday.” This theory is based on the idea that performing work at home immediately before or after traveling to or from a client’s home transforms the typically unpaid home-to-work travel time into compensable time.

For homecare companies to defend against travel time claims, it is vital that they use reliable time-tracking software and implement policies that expressly reference when work is to be completed to make expectations clear. Homecare companies also often struggle with calculating and paying travel time in split-shift situations where there is a substantial amount of time between client visits.

The DOL treats all travel time occurring within a day as compensable even when a significant break exists between client visits.

Meal and Rest Periods

Under the FLSA, employers are not required to provide nonexempt workers with meal periods. This means if an employer decides to pay for all time worked and not treat meal periods as unpaid, the employer does not need to track meal periods under the FLSA. If the employer does want to exclude mealtime as unpaid, the meal period must be “bona fide,” meaning it must last at least 30 minutes and the worker must be completely relieved from duty.

Tracking meal periods in the homecare industry is particularly difficult given that most caregivers are working remotely in the homes of clients. Meal and rest breaks are largely regulated by state law, which adds to the complexity of the issue.

While the FLSA does not require meal periods for nonexempt employees, some states impose break requirements for homecare employees. Additionally, in many of these states, for a worker to be considered fully relieved from duty, the worker must have the ability to leave the work premises during meal periods. This can create issues for live-in caregivers who may not be permitted to leave the client’s home during meal periods.

Homecare Compliance: Building a Record

A perennial challenge for companies is proving compliance with wage-hour laws. If made the target of a class or collective action or a DOL investigation, how can a homecare company prove that its time records are accurate and reliable? This section briefly addresses several key compliance measures.

One way for homecare companies to reduce exposure is to have experts audit, modify and sanction their timekeeping policies and procedures. As a first step, consider having a legal review of timekeeping and payroll policies, procedures, and record keeping for wage-and-hour compliance.

As a second step, set up and document periodic spot audits by a company representative knowledgeable about wage and hour laws and regulations, who can pay special attention to the field implementation of policies to ensure that the practices match the policies.

Another measure to reduce exposure is to have workers review their time records, certify that the records are complete and accurate, and certify that they have been paid for all time worked, including any time worked before or after their shifts or during meal periods. When complaints arise, written confirmation from workers that they were paid for all hours worked can serve as powerful evidence.

A well-publicized, robust complaint mechanism and process for conducting investigations with appropriate remedial action also may help in defending wage-hour litigation. If workers are required to report issues to a compliance hotline or a compliance officer who logs all complaints, the absence of complaints can be evidence of compliance. When complaints arise, written confirmation from workers that their issues have been resolved to their satisfaction also provides evidence to bolster the company’s good-faith defenses and establishes its commitment to compliance.

Finally, training managers and workers on legally compliant timekeeping and payroll procedures—and documenting that training—can be critical to defending litigation. Plaintiffs’ assertions frequently include: They did not realize companies had certain policies; they did not understand the policies; managers tacitly condoned practices contrary to policy; and managers actively required practices contrary to policy. In addition to in-person training, online training has proven to be an effective and efficient method of reaching workers.

Homecare companies should look for online training programs that provide coverage of state as well as federal law, employ interactive tests of workers’ understanding of the material, use realistic vignettes and workplace scenarios tailored to health care, and have electronic mechanisms to show completion of training (e.g., Jane Smith passed Timekeeping Training with a 95 percent score).

Companies with nonexempt care providers might consider training specific to areas most frequently litigated, i.e., off-the-clock work claims such as meal periods, travel time, sleep time, on-call pay practices, unpaid orientation time, remote work and reporting policy violations.

To reinforce the training, companies should discipline workers and managers who do not follow company procedure. A record of disciplinary actions for failure to adhere to legally compliant policies is excellent evidence that a company takes its policies and compliance obligations seriously.

Compliance measures can have a dramatic effect on litigation. For example, workers may be entitled to a relaxed burden of proof when claiming improper compensation for work performed if they can show the company failed to keep accurate time records. If a court finds the company’s time records are accurate based on compliance measures, the worker carries a greater burdenof establishing off-the-clock work.

Compliance measures also can be evidence of a company’s good-faith efforts to comply with wage and hour laws, which can limit the time period for which workers can seek overtime wages to two years under the FLSA (versus three years for willful or reckless violations), and can result in the denial of liquidated damages, thereby approximately halving the potential damages. Needless to say, reducing potential overtime liability by one year and halving the potential damages can make an enormous difference.

Homecare companies are working to improve wage-hour compliance measures on a more frequent basis so they can reduce their risk of being sued, while also enhancing their defenses in the event of investigation or litigation.