The healthcare industry continues to be the main target in the onslaught of wage and hour 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.
As recently reported by the New York Times, the Obama Administration and the Department of Labor continue to focus on the healthcare industry over its pay practices. Armed with significant financial resources and additional investigators, the DOL has increased its enforcement efforts across the country, with notable results. For example, the DOL recovered more than $2.7 million from a Boston hospital system for 700 employees in overtime back wages. Similarly, in St. Louis, a healthcare employer recently settled with the DOL for $1.7 million for over 4,000 employees. Residential nursing homes and assisted-living centers are facing similar investigations.
Many of the cases focus on overtime violations as a result of missed meal breaks. Under the federal Fair Labor Standards Act, an employee is entitled to a bona fide meal period during which the employee must be completely relieved from duty. If an employee is called back to work or is otherwise performing some patient tasks during the meal break, then the entire break period becomes compensable work time. Often, employers set their time clocks to automatically deduct 30 minutes per day in accordance with their policy that employees are required to take a full meal break during their shift. If an employee fails to report to his manager or to accounting that he worked during all or part of his meal break, the employer inadvertently could fail to pay the employee for all time worked. For hospitals and other healthcare employers, monitoring duty-free meal breaks is especially difficult considering the importance of patient care which complicates regular, set schedules. Also, these claims are difficult to defend because the employer does not have complete and accurate records of when the employee worked during the meal break.
The explosion of wage and hour actions against healthcare employers is due in large part because it is one segment of the economy that is growing and expanding its workforce, especially now with the enactment of health reform. Plaintiffs’ attorneys are also 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 hospitals and healthcare providers.
In response to the renewed attention by the government and plaintiffs’ counsel, all healthcare employers must be on alert and understand that they are increasingly the focus for a government investigation or a class action lawsuit. The tidal wave of claims is not receding and employers must be vigilant in their compliance with federal and state wage hour laws. Employers should ensure that they have compliance programs in place with a strategic plan for handling potential audits and enforcement actions. Additionally, establishing a defensive game plan in the event a lawsuit is filed is essential to limiting exposure to liability early in the case. If a comprehensive payroll practices compliance audit has not been performed yet this year, now is the time to spot potential vulnerabilities and implement corrective solutions. Areas to check include time spent before or after scheduled shifts, missed meal breaks, travel time spent between patients’ homes, recordkeeping and proper classification of exempt employees. Spending the time and effort proactively reviewing pay practices can pay off significantly in the event the government knocks on the door or a class action lawsuit is filed.