A healthcare business misclassified employees as independent contractors. In a recent investigation, the US Department of Labor’s Wage and Hour Division (DOL) has successfully recovered $142,360 in back overtime wages for 65 healthcare workers in Oklahoma. These workers were employed by the healthcare business, an on-site COVID testing provider based in California.
Healthcare Business Denied Workers Overtime Wages, Benefits and Protections Due to Misclassification
During the investigation, it was discovered that the healthcare business had misclassified the workers as independent contractors, thereby denying them the overtime wages, benefits, and protections they were entitled to. The DOL determined that the employer should have paid the affected employees one and a half times their regular rate of pay for hours worked over 40 in a workweek. By failing to do so, the company violated the overtime provisions of the Fair Labor Standards Act.
Misclassifying employees as independent contractors not only deprives workers of their rightful wages and benefits but also gives employers an unfair advantage over their competitors. Moreover, it harms the overall economy. According to Wage and Hour Division District Director Michael Speer in Oklahoma City, misclassification is a common practice in the healthcare industry. However, employers must understand and comply with the law to ensure proper payment for workers.
The healthcare business is a subsidiary of a larger company, a US-based healthcare services company that collaborates with healthcare providers to enhance patient outcomes, reduce costs, and mitigate risks through care models and technology solutions.
The DOL’s Wage and Hour Division plays a crucial role in enforcing laws related to pay practices and other labor standards. They investigate cases of misclassification, where employees are wrongly labeled as independent contractors, thus denying them essential benefits and worker protections.
Conclusion
This case highlights the importance for small and midsize business owners to properly classify their workers and comply with employment laws. Misclassifying employees can lead to severe financial consequences, as demonstrated by the recovery of $142,000 in back wages in this particular case.
Business owners must understand the criteria for determining employee classification and ensure that workers receive the wages, benefits, and protections they deserve. By doing so, employers can maintain a fair and compliant work environment, fostering positive employee relations and avoiding costly penalties.