Homecare Provider to Pay $7M After Denying Overtime

PHILADELPHIA—A federal court has ordered a Philadelphia homecare agency and its owner to pay more than $7 million in back wages and liquidated damages to 1,230 current and former employees after two years of litigation affirmed the U.S. Department of Labor’s finding that the employers willfully failed to pay overtime wages, in most cases by not including employees’ time for work-related travel when calculating wages.

On May 12, 2023, Judge Chad F. Kenney in the U.S. District Court for the Eastern District of Pennsylvania in Philadelphia found that Nursing Home Care Management Inc., operating as Prestige Home Care Agency, and its owner Alexander Dorfman owed $3,538,360 in back wages and an equal amount in liquidated damages to the affected employees.

The department’s Office of the Solicitor in Philadelphia litigated the case, brought after the department’s Wage and Hour Division determined the employers had violated the overtime and recordkeeping provisions of the Fair Labor Standards Act.

The court found that Prestige Home Care Agency willfully did the following:

• Failed to pay the required overtime rate for hours over 40 in a workweek by not paying home health aides for time spent traveling between clients’ homes in the same workday and between Prestige’s administrative office and clients’ homes in the same workday.
• Paid certain employees straight-time hourly rates for all hours worked, including for hours over 40 in a workweek.
• Segregated types of work performed by certain employees during a workweek rather than combining all hours worked when computing overtime wages due.
• Failed to keep accurate time and payroll records as required by law.

“Unfortunately, our investigators found yet another Philadelphia-area home health agency willfully shortchanging employees and skirting the law,” said Wage and Hour Division District Director James Cain in Philadelphia. “In this case, Prestige Home Care Agency denied 1,230 current and former employees more than $3.5 million in wages they earned for putting in long hours to help vulnerable people in our community.”

In June 2021, the department’s Office of the Solicitor in Philadelphia filed a lawsuit in the U.S. District Court for the Eastern District of Pennsylvania against the employers to recover the back wages and liquidated damages owed. In response, Judge Chad F. Kenney ruled that the employers willfully violated the FLSA, granted the department’s motion for summary judgment and forbade the employers from violating the FLSA in the future.

“The court’s judgment affirms the Department of Labor’s position that home care employers must pay employees for travel time, which is an essential part of their job duties,” explained Deputy Regional Solicitor Samantha Thomas. “The outcome in this case serves as a stark reminder to other homecare employers that the consequences for shortchanging employees can be costly both to the company’s bottom line and to its industry reputation.”

Established in 1995, Prestige Home Care Agency provides medical and non-medical home care services to clients throughout Southeastern Pennsylvania. These services include skilled and home healthcare, veterans assistance, adult home and personal care and intellectual disability services.

The Wage and Hour Division’s Philadelphia District Office conducted the investigation. Trial Attorneys Brian Krier and Sharon McKenna with the department’s Philadelphia Regional Solicitor’s Office litigated the case.

For more information about the FLSA and other laws the division enforces, as well as information about regulations in the homecare industry, contact its toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Workers can call the Wage and Hour Division confidentially with questions or concerns—regardless of where they are from—and the department can speak with callers in more than 200 languages. Help ensure hours worked and pay are accurate by downloading the department’s Android and iOS Timesheet App for free, available in English and Spanish.