The United States Department of Labor, Wage Hour Division (“DOL”), recently announced that it will focus enforcement efforts on the health care industry.  The DOL is responsible for investigating overtime and minimum wage violations under the Fair Labor Standards Act (“FLSA”) and has traditionally targeted low wage industries, i.e., agricultural establishments, restaurants, hotels and janitorial services.  With an increased budget and hundreds of additional field investigators, the DOL has set its sights on health care employers.

Several areas where health care employers frequently run afoul of the FLSA requirements are:

Exemption Misclassification:  Employers often misclassify employees as “exempt” from the FLSA on the assumption that all that is required is the payment of a salary.  While this may be proper in certain situations, federal regulations have very specific “tests” for determining whether or not an exemption applies.  CNAs and LPNs should not be classified as “professionals” under the FLSA, as they do not satisfy educational and duties’ requirements of the exemption.  On the other hand, employers can lose an exemption for employees who would otherwise be exempt if they do not meet salary and compensation requirements.

 

Independent Contractor vs. Employee Status:  Employers attempt to avoid payroll taxes and workers’ compensation insurance by classifying workers as independent contractors, rather than employees.  The DOL often disregards contractual relationships where circumstances indicate that workers are economically dependent upon the employer, rather than being in business for themselves.

Travel Time:  The DOL has enacted specific regulations for an employee to be paid for travel time.  Although an employee’s commute to and from work is not compensable; travel occurring during the workday is.  There are several exceptions to these rules, and they must be evaluated prior to refusing employee compensation for travel time.

Meal Period Violations:  Employers may deduct time for employee meal periods if i) breaks are over 25 minutes, and ii) if the employee is relieved of all job duties.  Employers should not automatically make deductions for meal periods unless the foregoing requirements are met.

Off the Clock Work:  Non-exempt employees must be paid for all working time which the employer has knowledge of, regardless of whether the time is reported on employees’ time cards.  Employers cannot refuse to pay for “off the clock” work to avoid paying overtime compensation.  Common violations occur when employees are required to work from home or answer work-related emails and phone calls outside of the standard work day.

In conclusion, health care employers must take a proactive approach to complying with the FLSA requirements.  We strongly encourage our clients to evaluate their payroll policies annually to avoid costly back pays mandated by the DOL.  Blalock Walters can effectively assist you with your compliance audits, so please contact our employment law attorneys with any questions you may have.

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