Home Health & Hospice Week

Watch out: Bonuses may put you in an overtime danger zone.

You’d better dot your i’s and cross your t’s when it comes to employee compensation, because wage and hour compliance is in the crosshairs for home care providers.

Multiple agencies have faced big legal actions and settlements in recent months, and some of the rules violated might catch you by surprise.

For example: Signing bonuses are a popular recruitment tool in this tighter-than-tight labor market. But don’t let bonuses mess up your overtime compliance.

That’s what happened to Three Rivers Home Care in Pittsburgh. The agency “failed to pay an overtime premium on sign-on bonuses for 26 home health aides,” the U.S. Department of Labor says in a release. “The bonuses were contingent upon each employee’s continuing employment until the time of payment. The Fair Labor Standards Act requires the bonuses be included in the regular rate of pay for overtime purposes,” says the DOL Wage and Hour Division.

“The employer also failed to maintain daily and weekly totals on the hours worked records, as the law requires,” DOL adds. The missteps cost Three Rivers nearly $12,500 in back wages and the same amount in damages — about $25,000 total.

“Workers can call the division confidentially with questions — regardless of their immigration status — and the department can speak with callers in more than 200 languages,” the release coaxes.

But the Three Rivers settlement pales in comparison to a Jan. 27 federal court order for another Pennsylvania agency and its owners to pay a whopping $2.8 million in back wages and damages.

Ardmore-based Red Lion Home Care Inc. and Scott Race and Stuart Race must pay $1.42 million in back wages and an equal amount in damages to 491 home care workers, the WHD says in a release. The court also ordered the Philadelphia-area agency to pay $251,637 in civil money penalties “due to the willful violations,” the release says.

Red Lion “paid straight time for all hours worked and adjusted rates of pay in overtime workweeks to avoid paying an overtime premium intentionally,” WHD says. “Specifically, the employer paid overtime at a rate lower than the required time-and-a-half rate.”

Plus: Red Lion failed to complete time records for all employees. “The actions by the non-medical home care agency violated the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act,” WHD says.

“Since the start of the pandemic, home care workers have been among the millions of workers who provide essential services while putting themselves at-risk,” Secretary of Labor Marty Walsh says in the release. “In addition to taking advantage of hundreds of their workers, Red Lion Home Care Inc. shortchanged some of the lowest paid and most vulnerable workers in our economy,” he blasts.

“This consent judgment is a strong step towards ensuring that home care workers receive all of the wages they have earned, including overtime pay,” Solicitor of Labor Seema Nanda says. “The U.S. Department of Labor is committed to taking all legal avenues to protect the rights of workers.”

WHD violations are on the rise, cautions law firm Locke Lord in Dallas. “With the dramatic increase in wage and hour claims and ever-changing federal and state regulations, wage and hour compliance has become of unparalleled importance to employers,” the firm stresses in online analysis. “Alleged violations of federal and state wage and hour laws, including overtime pay, misclassification of workers, unpaid break time and more, have proliferated and become a primary focus of plaintiffs’ counsel,” it warns.