Overview of DOH and WHD Investigations in Healthcare
The healthcare industry continues to be a main target of Department of Labor (DOL) Wage and Hour Division (WHD) claims asserting violations of unpaid overtime and missed meal periods. These claims often result in millions of dollars being paid out to settle lawsuits and government investigations. Recent settlements resulting from DOL investigations include a $4 million settlement on behalf of over 4,500 nurses and hospital technicians who claimed they were not paid the proper overtime. Similarly there have been large settlements in state and federal class action litigation across the country. Notably, healthcare employers have recently had some significant successes in healthcare wage and hour class and collective actions, obtaining dismissals, defeating plaintiffs’ motions for conditional certification in an FLSA collective action, and obtaining decertification. The increase of wage and hour actions against healthcare employers is due because it is one segment of the economy is growing and expanding its workforce, especially now with the enactment of health reform.
Besides increased government enforcement, the healthcare industry has become an attractive target for private wage and hour litigants. Plaintiffs’ attorneys are becoming much more aggressive in their efforts to target vulnerable employers. No longer waiting for a disgruntled employee to make a complaint, plaintiffs’ attorneys are using the ease of the internet to identify potential class members and highlight their investigations against susceptible healthcare providers.
As our industry is significantly trying to control costs, improve efficiencies, respond and adjust to healthcare reform legislation, and retain employees, healthcare employers must stay alert and know that they are increasingly the focus for a government investigation or a class action lawsuit.
In 2000, A second investigation-based compliance survey of the nation's nursing home industry by the DOL WHD (the first was in 1997) found only 40 percent of nursing homes in compliance with the Fair Labor Standards Act (FLSA). This is a sharp drop from the 70 percent compliance level reported by the department in 1997.
This month I'll look at the main areas of DOL WHD investigations in healthcare and suggestions for preventative measures.
Overtime Practices Investigations and Lawsuits
“Off-The-Clock” – Investigations and lawsuits often focus on and include allegations that hourly paid nurses and other employees are not compensated for work performed “off-the-clock”. These claims include “automatic” meal break deductions and rest breaks and failure to pay for work over 40 hours per week.
“Before and After Shifts” and “Mandatory Training” – Claims are similarly made by employees not compensated for worked performed before and after shifts and for mandatory training.
“Misclassification” - The FLSA requires that covered employees be paid minimum wage for all hours worked and overtime at least time and one-half the regular rate for all hours worked over 40 hours in a workweek. Exempt from the FLSA minimum wage and overtime requirements are individuals that meet certain executive, administrative or professional exemptions under the Act. The exemptions are narrowly construed against the employer and the employer must establish exempt status. In July 2015, the DOL proposed substantial amendments to the white collar exemption regulations. The DOL proposed raising the minimum salary threshold from $23,660 to $50,440 and to automatically increase the salary threshold annually basis based on inflation or other factors.
Family and Medical Leave Act
FMLA Compliance – The DOL is focused on failure to provide employees requesting FMLA leave a timely notice of their eligibility for leave; failure to notify employees of their rights and responsibilities under FMLA; failure to notify employees on a timely basis whether or not their leave was designated as FMLA; and failure to keep accurate records as required under the act. These notification and designation violations may create situations where employees, per the DOL, wereunlawfully denied FMLA protected leave, or leave taken was not properly designated as FMLA, which can impact employee' personnel records and can put workers at risk for suspension, termination of employment, and other adverse employment actions.
Self-Audit and Prevention
We counsel our clients on the measures that employers can take to minimize liability and exposure for WHD issues.
Developing and implementing a comprehensive W&H program would include:
-Verification of independent contract, subcontract and agency agreements
-Evaluate job descriptions
-Assess time-keeping systems
-Confirm records retention and record-keeping policies
-Develop a formal program for reporting and resolving employee wage concerns
-Establish a Workplace Practices Committee
Conduct internal and external W&H audits and comply with recommendations.
Train staff and educate managers about W&R regulations/laws. Education would include:
-Understanding overtime and recordkeeping
-Educating about DOL WHD inspection procedures
-Educate employees with policies and procedures to protect their wage rights
-Educate employees with the DOL’s inspection rights
Establish a Response Team and Inspections Protocols.
- FMLA Compliance. Self-auditing would include: Thorough reviews of your FMLA policies
- Compliance with employer posting requirements
- Legally compliant FMLA forms
- Legally compliant FMLA correspondence
- Update recordkeeping
- Train employees on FMLA policies and administration of the FMLA
The DOL WHD Request for Information/Records/Subpoena and Investigation - The DOL WHD inspection procedure complies with a set format with customary requests for information/records/subpoena before the on-site visit and interviews. For more information about the process and with assistance in preparing for a DOL WHD investigation, please contact our offices. These issues are beyond this article.
Mistakes We See By Employers
The most common mistakes we encounter with our healthcare employer clients and DOL issues are 1) failing to appropriately classify and/or maintain employee exemption status; 2) failure to calculate overtime rates for non-discretionary bonuses; 3) automatic deductions for meal periods; 4) joint employment; 5) management’s failure to monitor off-the-clock work; 6) pushing and pulling hours (crossing over workdays/workweeks); 7) compensation issues regarding meetings/seminars/workshops/education/training; 8) compensation issues regarding travel time; 9)improper classification of non-employees; and 10) state law violations.
Recognizing that the DOL WHD continues its scrutiny of healthcare employment practices allows our organizations to take proactive measures to minimize the risks described in this article. Healthcare employers must establish comprehensive compliance programs and evaluate compliance with state and federal wage and hour requirements with in-house and/or outside counsel.