Home Health & Hospice Week

You may be on the hook for employees who work off the clock.

The way you pay your employees is rife with landmines under federal labor law, so you had better toe the compliance line strictly or risk major penalties.

“Violations of the wage and hour provisions of the Fair Labor Standards Act (FLSA) and analogous state statutes are the single largest liability exposure for employers,” warn attorneys Joseph Sokolowski and Lindsay Zamzow of Fredrikson & Byron in Min-neapolis. “Since 1997, wage and hour litigation has tripled while most other employment litigation has stabilized or declined,” the labor law attorneys note in an article on their Web site.

“Because the FLSA has attractive damage remedies and often involves large numbers of plaintiffs in a single action, it is the employment lawsuit du jour,” they note. “Under the FLSA, plaintiffs can recover double the amount of actual damages and attorneys’ fees.” Attorneys’ fees can reach as high as seven figures, they stress.

But you can learn to navigate the minefield enforced by the Department of Labor’s Wage & Hour Division, assured attorney John Gilliland II in a recent Eli-sponsored audioconference series, “40 Wage-and-Hour Mistakes Healthcare Providers Make--And How to Avoid Them.”

Keep watch for potential violations lurking in these seven hot spots, Gilliland advised:

1. Regular rate. Under FLSA, overtime pay hinges on the rate calculations used to figure it. Employers must calculate an employee’s “regular rate”--total remuneration for the pay period divided by total hours worked during that period, Gilliland explained.

That’s the rate you must use to figure a non-exempt employee’s time-and-a-half rate of pay. You also use it to make sure you’re paying the employee at least minimum wage.

“The problem is many employers have never even heard of the regular rate,” Gilliland noted. “Or if they’ve heard of it, they don’t calculate it properly.” This is an easy compliance fix, so be sure to sharpen your math skills.

2. Unauthorized overtime. Many home health agencies feel they shouldn’t have to pay for overtime they don’t authorize--but that can land them in hot water. Under FLSA, an employer has to pay for any overtime hours they “permit or suffer” to be worked, Gilliland pointed out. That doesn’t mean the same thing as authorizing the hours.

If you refuse to authorize the hours but still know of them, the law views you as suffering or permitting the work and therefore you’re on the hook to pay for it, Gilliland maintained. You can discipline or discharge the employee, but you should still pay for the time or face Wage & Hour violations.

Example: An audioconference caller had a worker who worked unauthorized time, was disciplined by the agency, then left the agency’s employment but asked for payment for those unauthorized hours. However, there was no time record for hours worked.

The HHA may very well be obligated to pay for that time, Gilliland said. While the outcome would rely heavily on the case’s specific facts, the Wage & Hour Division could find the agency liable for the pay and then get into figuring out how many hours’ pay are owed. “It’s a maddening situation when it happens,” he acknowledged.

Best shot: Try to keep these sticky situations from occurring by strictly enforcing your no-unauthorized-overtime policy, Gilliland advised. Discipline and even dismiss employees for working such overtime as an example to other employees.

3. On-call pay. On-call pay can really mess up both your overtime and minimum wage calculations unless you know the ropes. Providers tend to pay staff a small lump sum or hourly amount for carrying a pager and answering calls while on call, Gilliland noted.

That’s fine, but you must remember to include the remuneration in the regular rate calculation (see #1). That will increase your employee’s overtime rate of pay, because you’re adding the on-call pay to her regular compensation, Gilliland cautioned. “If you don’t do it, you’re not paying the total amount of overtime pay to which the employee is entitled.”

“We see employers make this mistake over and over again,” he observed.

For minimum wage, you have to count the hours on call in the calculation, Gilliland added.

Do this: “On call is leading to so many violations,” Gilliland laments. “I’ve really got to recommend that if you’re paying nonexempt employees to serve in on-call status, have your pay arrangements for them and your recordkeeping reviewed to be sure you’re doing it properly.”

4. Minimum wage reductions. Don’t reduce employees’ pay for items like uniforms to the point that they fall under minimum wage, Gilliland counseled. If it happens in a week when the employee also earns overtime, then you face both a minimum wage and an overtime violation.

5. Inservices and orientation. Remember to pay non-exempt employees for this time as well, Gilliland urged. And count the hours toward overtime, if applicable.

Tip: You don’t have to pay employees their regular rate for attending such sessions. You can pay them down to minimum wage whether or not their usual rate is more than that amount.

6. Accurate time records. You can choose how you want to keep your employees’ time records--time sheets, time clock, etc.--but FLSA requires you to keep accurate records of hours worked in some manner.

Problem: Some HHAs have started using telephony systems for workers to “punch in and punch out” in patients’ homes via the telephone. But those systems don’t take into account travel time, orientation, inservices, work at home and other hours you are required to pay, Gilliland warned.

Solution: Set up a way for employees to log these additional time periods in your records.

7. Start of the workday. An emerging problem in Wage & Hour compliance is figuring out when the employee’s workday actually starts, Gilliland pointed out. If you require your employee to log into email or another system to check messages before traveling to the first client, that employee’s day may start when she logs onto the system. That means you’d be on the hook for the additional time, including travel time to the first patient’s house, Gilliland cautioned.

“This is just beginning to emerge as an issue,” Gilliland said. “The law in this regard is very unsettled.” Compliance is likely to depend on how long it takes the employee to check the messages, Gilliland predicts. A few minutes probably won’t change things, but 20 to 30 minutes may signal a workday start.

Take heed: Keep this developing issue in mind when you implement your policies and procedures. v