I have defended dozens of nursing homes, home health services, residential care centers and other health care providers in audits of their wage practices by the US. Department of Labor (“DOL”) and state DOLs.  I have come to learn that there are unique wage hour issues and challenges in this industry and that many well-meaning employers, seeking to comply with the law, step on regulatory landmines and end up in trouble.

Well, buckle up.  The USDOL is stepping up its audit/enforcement efforts in this industry, which it believes is rife with violations.  (And, it is right!) This follows the 2021 implementation of a nationwide scrutiny; this has, to date, resulted in almost 2000 investigations, recovery of almost $30,000,000 in back wages and more than $1,000,000 in agency-imposed penalties, i.e., Civil Money Penalties.

The biggest issue is failure to pay overtime or keep proper records but there has been a surge in DOL litigations alleging misclassification violations, i.e., misclassifying people as independent contractors.  The data shows that the Southeast (e.g., Alabama, Florida) is being focused on but that enforcement “cloud” will certainly spread to all parts of the country.  In these audits of southern facilities, the agency found violations in 90% of the audits undertaken.  More than $16,000,000 in back wages has been secured for more than 13,000 workers.

The DOL warns that employers should “review their pay practices to ensure they comply with the law.”  These practices should focus on the unique wage-hour issues facing employers in the health care industry, such as on-call time policies and preliminary and postliminary work, which involves workers coming in early to perform tasks related to their primary jobs.  I have found this to be an issue in the audits of health care facilities I have handled.

The Takeaway

The best protection is to conduct or have wage-hour counsel conduct, a full-scale audit of all an employer’s pay practices, meaning scrutiny of exemption classifications, independent contractor classification, working time policies, on-call policies, bonus and commission policies and recordkeeping.  That kind of review gives the employer a good baseline.  I have done dozens of these for clients, the end result being a bullet-pointed report, sans legalese, that apprises the employer of the good, bad and the ugly in its compensation protocols.  And, most importantly, how to fix what’s wrong!

An ounce of prevention,,,