In 2010, U.S. Department of Labor’s Wage and Hour Division (DOL) announced that two out of three healthcare employers audited in New York were not in compliance and undertook to actively investigate wage and hour issues for these healthcare entities.  In addition to increased government enforcement, the healthcare industry has become an attractive target for private wage and hour litigants in part because employee pay is better in healthcare than other industries.  In fact, wage & hour litigation continued in 2010 to out-pace other types of workplace class actions.

Wage-hour violations that plague many employers also occur in the healthcare industry, such as: misclassification of workers (as exempt from overtime pay), “off-the-clock” work, failure to calculate overtime pay correctly, and improper wage deductions.  Off-the-clock work is a particularly common problem in the healthcare industry and is often engaged in by some of the most loyal employees, who clock out and see that extra help is needed and help out before leaving.  In December, a jury in Washington state in the case of Rekhter, et al. v. Washington Department of Social and Health Services, Case No.07-2-895-8 (Superior Court of Thurston County, WA), recently awarded the employees, home healthcare workers, a record verdict of over $57 million.  In light of this successful litigation, employers in the healthcare industry should expect to see a heightened attention given to wage & hour litigation.

So, are you in compliance with the Fair Labor Standards Act?  What should you do?  Employers are best advised to conduct periodic audits of employee classifications for overtime purposes and to review payroll practices, particularly in light of the DOL’s heightened enforcement activity and increased private litigation.  Employers should also educate managers and employees about company policies for off-the-clock work and overtime and review all wage & hour policies and procedures.