The home healthcare industry has continued to grow in popularity, as hospitals and nursing homes see a decline. With this rise in popularity comes a rise in risks— it’s important to make sure you are protecting your business and your home healthcare employees from potential threats. Central Insurance Agency is prepared to provide you with a custom insurance solution to fit your needs.
A Pittsburgh home health care agency must pay $1.6 million in back wages and damages after misclassifying health aides as independent contractors, a U.S. District Court ruled.
The court found Christian Home Healthcare Corp, which is based in East Allegheny, had violated the Fair Labor Standards Act. It ruled that the company incorrectly identified 546 home health aides as independent contractors rather than employees, a distinction that prevented the aides from receiving overtime pay.
A debate over how to determine the classification of workers has played out in courts and state legislatures for years but has intensified recently as more people turn to the gig economy for work.
The Trump administration moved in January to clear up the confusion, issuing a new rule clarifying the difference based on two main factors: the nature and degree of control over the work and the worker’s opportunity for profit or loss based on initiative or investment. In other words, the distinction hinged on how much control workers have over things like their own schedules and their own tools, as well as how much control they have over how much money they make.
That rule is set to go into effect this month, but President Joe Biden’s Labor Department may move to pause the rule, alter it or scrap it entirely.
For workers, the distinction — and the confusion around it — can determine things like access to unemployment benefits, minimum wage requirements, overtime pay and paid time off. It touches on industries across the board and affects workers from nail salon technicians to Uber drivers to construction workers to financial consultants.
In this case, the U.S. District Court for the Western District of Pennsylvania ruled that Christian Home Healthcare had misclassified the home health aides and then failed to pay overtime wages for instances when they worked more than 40 hours a week.
The agency did eventually change the classification but continued to pay “straight-time rates” for overtime hours rather than paying the overtime rate of one and one-times their regular rates.
Work weeks for some employees could be as long as 90 hours, according to the complaint filed with the District Court. The agency also failed to keep a record of the number of hours worked by office staff, the ruling found.
Christian Home Healthcare officials could not be reached for comment by deadline.
The court’s action followed an investigation into Christian Home Healthcare by the U.S. Department of Labor’s Wage and Hour division.
“Health care workers risk their lives every day to care for our loved ones and remain on the front lines keeping our country healthy and safe,” Jessica Looman, the division’s principal deputy administrator, said in a prepared statement. “They deserve to be paid every cent they have earned.”
Christian Home Healthcare and its owner are now on the hook for $812,675 in back wages and an equal amount in liquidated damages to the affected home health aides, as well as $20,000 in civil money penalties.