DOL dings healthcare staffing agencies for $2.4 million in back wages

Healthcare staffing agencies in Massachusetts and Pennsylvania that denied employees overtime wages are on the hook for $2.4 million in back wages and damages.

A consent judgment and order requires Gate Solution Systems Inc. of Malden, Mass., and Healthcare Services Group Inc. of Bensalem, Pa., to pay 341 employees denied their wages as a result of the violations.

The Department of Labor found that Gate Solution Systems Inc. misclassified housekeepers, laundry and dietary workers in Maine, Massachusetts, New Hampshire and Vermont as independent contractors.

Employees were not paid the required overtime rate when they worked more than 40 hours in a workweek.

In addition to paying back wages and liquidated damages to the affected employees, the consent judgment enjoins Gate Solution Systems and its officers and managers from future Fair Labor Standards Act violations, including failing to maintain employment records.

“Misclassification of employees as independent contractors remains a serious concern for the Department of Labor,” said DOL Wage and Hour Administrator Jessica Looman. “Preventing and combating misclassification is a priority for the Wage and Hour Division as it deprives workers of their rights to full wages, health and safety protections, unemployment insurance, workers’ compensation and tax protections.”

“This case’s outcome should remind employers that the U.S. Department of Labor will take appropriate action, including legal action, to protect workers whose employers deny them proper pay under the Fair Labor Standards Act,” said Solicitor of Labor Seema Nanda. “The Department of Labor will always strive to protect the rights of workers.”