A Look at the EPLI Landscape for Health Care

Several employment-practices developments and potential legislation could have a significant impact on the health care industry, including in allied health care, home health care and other sectors. Let’s take a look at how the current and future employment law landscape may affect health care agencies and providers.

Employee Misclassifications

A home health care agency in Pittsburgh was recently ordered to pay more than $1.6 million in back wages and damages to 546 home health aides. The U.S. Department of Labor (DOL) found that the agency misclassified the aides as independent contractors and failed to pay required overtime wages, which is in violation of the Fair Labor Standards Act. The agency was also ordered to pay $20,000 in civil penalties.  

In addition to misclassifying the aides, investigators found that the agency continued to pay some aides straight-time rates for overtime hours, even after it began to classify them correctly as employees, and failed to keep a record of the number of hours worked by office staff.

It’s imperative that employees are properly classified and paid properly for the work they perform. As more services are expected of home health care aides, particularly in the face of the ongoing pandemic, home health care agencies must ensure they remain in regulatory compliance. Not only will agencies avoid having to pay back wages and penalties and the possibility of an employment practices-related lawsuit, they will also have better results in retaining their staff – vital in today’s tight health care market. 

In fact, employee misclassification is a front-and-center issue under the new Administration. During the presidential election, the Biden campaign stated that it plans to “aggressively pursue employers who intentionally misclassify workers as independent contractors” by “enact[ing] legislation that makes worker misclassification a substantive violation of law under all federal labor, employment, and tax laws with additional penalties beyond those imposed for other violations.” It’s expected that the Biden Administration will take an aggressive, multi-pronged approach to addressing misclassification, including instructing federal agencies such as the Department of Labor (DOL) and National Labor Relations Board (NLRB) to increase regulation and enforcement. The Administration’s intent is to reverse the restrictive “joint employer” standard and establish a federal standard modeled on the “ABC” test for all labor, employment and tax laws. The “ABC” test examines whether the worker is (A) free from the control and direction of the hiring entity, (B) performs work that is outside the usual course of business of the hiring entity, and (C) is customarily engaged in an independently established trade, occupation or business. 

Minimum Wage Hikes

Accord to a National Employment Law Project report, 2021 has already ushered in (and will continue to do so) minimum wage hikes in 20 states and 32 cities and counties, with 27 cities and counties setting the minimum wage at or above $15 per hour. This will affect home health care agencies across the country, as aides are typically paid minimum wage. Some health care organizations had already independently raised their minimum wage in 2020 in an effort to attract and keep staff. Agencies should be planning for employee pay hikes. 

Increase in COVID-19 Whistleblower Cases, Expansion of Protections

Health care employees, according to the National Law Review, filed a significantly higher number of whistleblower claims against employers in 2020 than in prior years. This was due to the increased exposure to COVID-19 for health care workers, which resulted from the initial unavailability of personal protective equipment (PPE) at the outset of the pandemic; a patchwork of local, state, and federal reporting; isolation; and inadequate training. The DOL’s report indicates that the number of occupational safety and health whistleblower claims—39% of which were directly related to COVID-19—increased by 30% between February and May 2020 as compared to the same period in 2019. 

New York has already expanded its whistleblower protections for health care workers in response to the pandemic. Governor Cuomo signed an amendment carving out a new protected category of workplace safety, which barred health care employers from retaliating against employees who complain to the press or on social media about unsafe workplace conditions. Colorado, Philadelphia, and Virginia followed suit: Colorado enacted legislation which prevents health care employers from terminating employees due to complaints about flawed virus protection and lack of PPE during public health emergencies. Philadelphia passed the Essential Worker Protection Act, which includes a specific ban on retaliation against health care employees raising workplace safety concerns. Virginia enacted a law that includes a provision prohibiting health care employers from firing an employee who voices “a reasonable concern” about virus infection control to the employer, a government agency, the press, or through social media. These measures further increase employment practices liability exposures for health care providers.

We’ll continue to keep you advised of potential legislation and regulatory changes that could affect the health care industry. Manchester Specialty Programs specializes in providing agents and brokers with totally integrated business insurance solutions, including Management Liability products, to meet the needs of Home Care, Allied Health and Human/Social Services organizations. For more information about how our products and services can help protect your insureds, please contact us at 855.972.9399.

Sources: National Law Review, Fischer Phillips Law