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On December 3, the Department of Labor (DOL) announced that it recovered a significant amount in wage and hour damages for employees. Specifically, the DOL’s Wage and Hour Division (WHD) stated that it received more than $2.4 million for 341 employees. Two healthcare staffing companies employ these workers. Chiefly, the staffing agencies denied employees overtime wages, including employees misclassified as independent contractors. Consequently, this action violates federal laws like the Fair Labor Standards Act. Previously, in September, the DOL recovered nearly $2 million in overtime damages and back wages for restaurant workers.
The Fair Labor Standards Act
As has been noted, the WHD found that the employers violated the Fair Labor Standards Act (FLSA). As the nation’s primary wage law and one of the major employment laws employers must follow, the FLSA establishes minimum wage and overtime protections for non-exempt part-time and full-time employees. However, under section 13(a)(1) of the FLSA, employees paid above the FLSA’s current salary basis are generally exempt from overtime provisions. To qualify for overtime exemption, employees must have been paid on a salary basis at not less than $684 per week. These exempt employees must also perform at least one of the duties of an executive, administrative, or professional employee.
Overview of the Wage and Hour Damages Lawsuit
Basically, the WHD found that one of the staffing agencies misclassified housekeepers, laundry, and dietary workers as independent contractors. Overall, the employees, in this case, provided services at healthcare facilities in Maine, Massachusetts, New Hampshire, and Vermont. Markedly, employees were not paid the required overtime rate when they worked more than 40 hours in a workweek.
In addition to paying back the wage and hours damages to the affected employees, the consent judgment enjoins the agency and its officers and managers from future Fair Labor Standards Act violations. These include failing to maintain employment records.
Filed by the DOL’s regional Office of the Solicitor in Boston, the complaint also names a joint employer responsible for wage and hour damages. This second staffing agency supervised the employees who provided the cleaning, laundry, and dietary assistance services. The first agency initially hired all of these employees.
“This case’s outcome should remind employers that the U.S. Department of Labor will take appropriate action, including legal action, to protect workers whose employers deny them proper pay under the Fair Labor Standards Act,” said Solicitor of Labor Seema Nanda. “The Department of Labor will always strive to protect the rights of workers.”
Employer Takeaways
In conclusion, as mentioned before, the FLSA requires that most employees in the U.S. be paid at least the federal minimum wage for all hours worked. Unquestionably, employees must also receive overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 in a workweek.
To help business owners and their managers comply with overtime exemption laws and avoid wage and hour damages, WorkWise Compliance created the Federal Overtime Exemptions Checklist. This digital solution helps employers, managers, and human resources representatives understand the DOL’s overtime exemption rule requirements and determine if employees qualify as “exempt” under the salary and duties tests established by the federal FairPay Overtime Rules.
