Dive Brief:

• Petersen Health Care, Inc. of Peoria agreed to pay $2,939,576 in back pay to 3,024 caregivers at 84 facilities for allegedly violating the Fair Labor Standards Act, the U.S. Department of Labor announced May 24.
• The company manages residential nursing care facilities in Illinois, Indiana, Iowa and Missouri, according to the DOL announcement. Investigators for the DOL's Wage and Hour Division found the company failed to pay wages for meal periods of less than 20 minutes and didn't add bonuses and other incentive pay to the caregivers' hourly rate when calculating overtime, the agency explained. As a result, Petersen Health Care "wrongly assumed the affected workers were not entitled to overtime pay," the DOL said. 
• Petersen Health Care doesn't "agree with the Department's claims or assumptions they made in determining their findings," the company told HR Dive in an email. But "the current economic environment dictated the settlement," it wrote. "Petersen Health Care pays, and has always paid, its employees fairly and equitably for all time worked," the email said. "We regularly review and evaluate our pay practices to ensure our hard working employees are being compensated fairly and equitably for all the time spent caring for our seniors in need."

Dive Insight:

The DOL has been aggressive about pursuing suspected overtime violations, and its investigations have led to hefty fines against employers. For example, the agency recently recovered $181,379 in back wages for 235 workers of two Birmingham, Alabama, delivery companies that subcontract with FedEx, the DOL announced May 25. 

Investigators found the delivery companies incorrectly classified workers as exempt from overtime pay, the agency said. The companies misapplied an FLSA exemption from overtime requirements when workers' duties involve driving on interstate highways or operating delivery trucks weighing at least 10,000 pounds, or when they are working for an employer who falls under regulations governed by the U.S. Department of Transportation, according to the DOL.

The DOL also recently recovered $33,399 in back wages and liquidated damages for 14 crew members of a Hawaii tour operator after investigators found the employer paid workers partial overtime at the correct time-and-one-half rate but paid the remaining overtime compensation at straight-time rates, according to a May 26 announcement. The employer then improperly listed the straight-time payments as bonuses, the DOL said.

Given the low employment rates, "employers who fail to meet their legal obligations to their workers are competing with employers who pay workers their rightful wages," WHD District Director Terence Trotter stated in the May 26 announcement. "[E]mployers whose pay practices violate the law will find it difficult to fill vacancies with the people needed to do the work that makes their company successful," Trotter said.

Some FLSA regulations are fairly straightforward, such as requirements governing pay for meal and rest breaks, which the DOL explains in Fact Sheet #22. But other compliance issues can get complicated, like knowing when to include bonuses and other incentive pay in calculating overtime, which the DOL explains in Fact Sheet #56C.

Misclassifying workers is another DOL red flag. In one example, a medical staffing company was ordered to pay more than $7.2 million in back wages and liquidated damages to 1,105 workers it intentionally misclassified as independent workers, the agency announced in January.

Conducting a comprehensive wage and hour audit can help ensure compliance with wage and hour laws, an employment attorney wrote in a recent article for HR Dive. There are two kinds of audits: precautionary audits the employer conducts internally and the more worrisome audits ordered and conducted by a government agency, the attorney said.

An agency's decision to conduct an audit isn't ordinarily a random one, the attorney emphasized. Instead, an agency like the DOL chooses to investigate a company's wage and hour practices after receiving a tip to do so, or when the business was previously audited and cited violations.

The audits generally involve four elements: 1) a "deep dive" into how employee time is recorded, including the accuracy of the timekeeping system and whether all of the nonexempt employees' compensable time worked is captured; 2) the company's wage and hour policies; 3) whether employees are correctly classified; and 4) other miscellaneous items, such as whether previously identified violations have been corrected.

Preparation is key and companies should consult with experienced legal counsel, the attorney said.