Crackdown is Coming: Are You Paying Overtime?

by Tim Rowan, Editor

T

he Department of Labor, Wage and Hour Division, has selected several southeastern states as targets for its investigation into a practice that appears to be quite common, underpaying in-home caregivers. It appears, based on early DoL reports, that some Home Care agency owners in Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee either do not understand the law, or simply try to get away with it.

According to a mid-February, 2023 report:

“From 2020 to 2022, Wage and Hour Division investigators identified violations in nearly 89 percent of more than 1,200 home care and nursing care investigations. These reviews led the agency to recover more than $16.2 million in back wages and liquidated damages for more than 13,000 workers.

On October 13, 2022, the DoL published a Notice of Proposed Rulemaking to revise the Department’s guidance on how to determine who is an employee or independent contractor under the Fair Labor Standards Act. The NPRM proposes to rescind the rule, Independent Contractor Status Under the Fair Labor Standards Act (2021 IC Rule), that was published in the closing days of the previous administration, January 7, 2021, and replace it with an analysis for determining employee or independent contractor status that is more consistent with the FLSA as interpreted by longstanding judicial precedent. The Department believes that its proposed rule would reduce the risk that employees are misclassified as independent contractors, while providing added certainty for businesses that engage (or wish to engage) with individuals who are in business for themselves.

A DoL publication explained this targeted effort aligns with the agency’s initiative to protect essential workers in the Southeast. See an April 28 update on progress of the proposed rule here.

Writing for a Polsinelli Law firm bulletin, home care attorney Angelo Spinola stated, along with the caveat that this is not to be construed as legal advice, “The DOL is not required to give employers prior notice of an audit. In fact, WHD investigators often initiate unannounced investigations to observe normal business operations. As such, the best way to prepare for a DOL audit is to conduct regular and periodic internal audits of employment records and policies to ensure compliance with the FLSA. Internal audits typically include a review of exempt employee classifications, independent contractor classifications, payroll and time records, and FMLA and other leave law compliance. It is advisable to work with knowledgeable employment attorneys who can counsel employers on current wage and hour laws and best practices.”

From 2020 to 2022, Wage and Hour Division investigators identified violations in nearly 89 percent of more than 1,200 home care and nursing care investigations. These reviews led the agency to recover more than $16.2 million in back wages and liquidated damages for more than 13,000 workers. In addition, the division assessed employers a total of $156,404 in civil money penalties. The February DoL report cited two recent North Carolina cases as examples of the practices it uncovered throughout the South:

Employers can contact the Wage and Hour Division at its toll-free number, 1-866-4-US-WAGE. The division also offers online resources for employers, such as a fact sheet on Fair Labor Standards Act wage laws overtime requirements. Workers who feel they may not be getting the wages they earned may contact a Wage and Hour Division representative in their state through a list and interactive online map on the agency’s website. Workers and employers alike can help ensure hours worked and pay are accurate by downloading the department’s Android Timesheet App for free. Learn more about Wage and Hour Division.