Each year, thousands of business owners across the United States face charges of wage theft, mismanaging overtime and blundering on employee classification.
While the rising tide of FLSA lawsuits spans across the business world, employers should be aware that some industries have a particular target on their backs when it comes to these costly disputes with employees.
The health care industry ranks in the top five for FLSA wage and hour prosecutions by the Department of Labor and home health care providers are among the worst hit. Why is this?
Daniel Abrahams of Brown Rudnick LLP says that, contrary to popular opinion, these lawsuits don't just befall unscrupulous employers:
"A dispute with the DOL or a group of employees doesn't mean you're a bad employer. It just means that you ran afoul of some very complicated rules. There's no shame to be had in not knowing all the rules offhand, or running into trouble with these requirements."
So, why is home health care in the Top 10 for wage and hour prosecutions? What can you do about it?
- The "We Can Help" Campaign
The DOL has specifically targeted several industries with lower-wage workers that have a high likelihood of being misclassified. That came in the form of the "We Can Help" campaign, which was created to inform workers about their rights and how to file a complaint with the DOL. This information was made available in online fact sheets and a press release and has led to more lawsuits and investigations by the DOL in the home health care industry.
What You Can Do: Recognize that we live in an information age. Count on your employees knowing their rights, and audit and operate your business accordingly.
For clients in need of care, a 9-to-5 schedule just doesn't apply—which means that overtime is a mainstay of the home health care industry. However, overtime means more than higher payroll costs. It's also the cause of 80 percent of wage and hour lawsuits prosecuted by the DOL.
What You Can Do: Many home health care employers have policies that restrict unauthorized overtime. But remember, under the FLSA you're required to pay employees for all hours worked—whether those hours were authorized or not. Create a clear policy that outlines discipline for accruing overtime without permission, but be aware that you are still required to pay your employee for the hours worked.
Off-the-clock work, sometimes called “wage theft,” is another significant problem in the health care industry. It happens when business owners ask or encourage employees to engage in communication or physical work while employees are off the clock. While it may be necessary to connect with an employee after hours—especially in the health care industry where clients may have needs that extend beyond office hours—it's crucial to ensure employees are being paid for that time.
What You Can Do: Be very careful to steer clear of the mindsets of, "It's just one email" or, "My employee is a good person—they won't mind pitching in!” Those minutes add up, and they lay the foundation for eroding morale and lawsuits.
The home health care industry often pays employees on a "per visit" basis or a flat rate for work completed. However, this practice has landed more than a few employers in hot water for FLSA violations because of conflicts with the DOL's test of what counts as a "single job." (A number of lawsuits have been won based on the fact that a single visit to a patient's home comprised multiple jobs.) Minimum wage violations can also crop up at the intersection of long visits paid by low rates.
What You Can Do: Be very careful when it comes to per-visit and flat rate payments in home health care. Consult with your legal counsel to ensure you are complying with the FLSA's definition of a "single job" when you are arranging for flat-fee payments or per-visit payments. Depending on what your legal counsel finds, it may be a good idea to make some adjustments!
The home health care industry is filled with mobile employees. Employees on the move present a big challenge when it comes to keeping track of employee hours accurately and efficiently.
This can be bad news for the FLSA—which exists to ensure that nonexempt employees are paid accurately for the hours they work.
What You Can Do: Putting safeguards and procedures in place to ensure employees are able to accurately track their hours on the move is absolutely critical. Using a mobile time clock allows employees to use the devices they already carry with them to track time on the go—and gives managers the added bonus of seeing who is on the job, when they arrived and departed and whether or not overtime was accrued.
Remember, good employers find lawsuits on their doorstep every day when it comes to the FLSA, and there's no time like the present to make sure you have protected your business in every way possible. Don't shirk on regular self audits or legal counsel for your unique business, keep accurate records of employee hours and compensation and pay close attention to trouble spots like overtime, off-the-clock work and flat-fee work.