Home Health Agencies Involved in Fair Wage and Hour Settlements

In late July 2017, thirteen home health care agencies in Indiana settled with the U.S. Department of Labor (DOL) to resolve violations of overtime provisions in the Fair Labor Standards Act (FLSA). The compensation to 379 home health workers totaled $948,000 in back wages and damages. This amount doesn’t even include legal expenses.

The DOL investigations that led to the citations and settlement found violations of the FLSA’s overtime and recordkeeping rules as well as the misclassification of employees as independent contractors. These guidelines can be very subject to interpretation, and home health providers of all sizes may inadvertently fail to abide by the law – even when trying to follow all rules set forth by state and federal legislators and regulators. Compliance information specific to the home care industry can be found at the DOL’s Wage and Hour Division website. Agencies should review and understand the full spectrum of DOL expectations and get professional staffing and payroll support if in-house resources are not available. Failure to comply with these rules can lead to far worse penalties than having to compensate affected workers.

Employers are liable for not only fair pay; they are also potentially responsible for health insurance benefits for those deemed employees. Failure to classify a worker as an employee and secure or offer appropriate benefits and protections could expose your agency to further financial consequences.

Some workers are exempt from FLSA mandates, so agencies must also familiarize themselves with exemption rules specific to the home health assistance industry. “Exempt” employees receive a salary and are expected to do whatever is required to fulfill stated job duties, no matter how many hours that takes. Exempt employees receive the same amount of pay every pay period, irrespective of hours worked. Though they may be subject to leave request rules and paid time off limits, they generally don’t “clock in and clock out” or report on a time sheet. They also don’t receive overtime pay as a rule.

There are multiple categories of exempt workers, some of which overlap with home health caregivers, which can make sorting out who is exempt from FLSA rules and who isn’t a difficult task. Learned professionals, such as registered nurses, may well be exempt. So, typically, are managerial staff, those who have authority over two or more employees, including hiring, firing and evaluations, etc. Confusion sometimes arises over specialists who may go on calls to help with physical therapy, medical evaluations, or other in-home roles. It’s always best to seek the advice of an expert on the FLSA in these circumstances to avoid falling out of compliance. If you find you have been making a long-term mistake, it is a good idea to correct the error, compensate those affected and self-report the failure and the corrective action. Your legal and/or financial counsel can best advise you on such matters.

Also, when purchasing business insurance for your home health care or hospice agency, be sure to ask about risk management tools for your human resources and finance departments. You may have free or reduced cost access to numerous tools for developing and enforcing policies, guidelines and procedures.

About Manchester Specialty

At Manchester Specialty Programs, our comprehensive home health care industry business insurance program includes a wide range of insurance solutions including Employment Practices Liability and Workers’ Compensation. We have a long-term commitment to insuring the home health care industry, having begun to address the special insurance needs of this sector more than two decades ago. We can help home care & hospice agencies and their insurance brokers navigate the coverage needs of a home health care business and find the best fit for insurance coverage. For more information about our programs and coverages, you or your local insurance agent can contact us today at 855.972.9399.

Sources: DOL, The Balance