Hot Wage/Hour Issues (Littler Report)

Law firm Littler Mendelson’s recently issued special report, Hot Wage and Hour Issues for Home Healthcare Employers (Littler Report), which offers practical tips for employers in any industry.

The recently published Littler Report finds that wage and hour lawsuits against home healthcare providers have frequently involved three issues:

  • Misclassification (employees who claim they have been misclassified as exempt and are, therefore, owed overtime or other compensation)
  • Time worked (nonexempt employees who claim they have not been paid for all time worked)
  • Independent contractors (nonemployees who claim they actually are employees and must be compensated accordingly)

Note: Find the complete Littler Report here.

Misclassification—The Professional Exemption

The Littler Report reminds employers that to be exempt under the Fair Labor Standards Act (FLSA), employees must satisfy both the duties and compensation requirements of the applicable exemption. Under the duties requirement of the learned professional exemption, for example, an employee’s primary job duty must involve work:

  • Requiring advanced knowledge,
  • That is in a field of science or learning, and
  • That must be customarily acquired by a prolonged course of specialized intellectual instruction.

Under the Department of Labor (DOL) regulations, the Littler Report explains that medicine is enumerated as a “field of science or learning,” and the possession of an academic degree is prima facie evidence of specialized instruction.

Generally, courts have found that home healthcare employees such as registered nurses, physical therapists, occupational therapists, medical social workers, registered or certified medical technologists, registered nurses, and physician assistants are likely to meet the duties requirements of one or more of the exemptions.

However, licensed practical nurses and other similar healthcare employees are not likely to meet the duties requirement, the Littler Report suggests.

Just having the requisite degree or license may not be enough to satisfy the learned professional exemption. The employee’s primary duty must involve specific work that requires advanced knowledge.

To avoid classification problems, the Littler Report suggests that to the extent possible, employers should:

  • Limit the percentage of nonexempt work done by exempt employees.
  • Ensure that job descriptions and company manuals accurately reflect the exempt duties.

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Compensation Requirements

In addition to the duties requirement, an employee must meet certain compensation requirements to be properly classified as an exempt employee, says the Littler Report. Generally, under the FLSA, an exempt employee must be compensated on a salary basis of not less than $455 per week that cannot be reduced because of variations in quality or quantity of work.

Hot Issue

The Littler Report warns of a recent hot issue in litigation against home healthcare providers. That is the common practice in the industry of paying home health clinicians on a “per-visit” basis in which a flat fee is paid for work related to a particular visit.

In general, explains the Littler Report, under the federal regulations, a “fee” is paid as compensation for a “unique” job, as opposed to “a series of jobs repeated an indefinite number of times and for which payment on an identical basis is made over and over again.” Whether the compensation is paid for a “unique” job in the home healthcare industry has been the subject of litigation.

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Claims by Nonexempt Employees

The Littler Report discusses three common claims by nonexempt employees related to uncompensated or “off-the-clock” work:

  • Work performed during meal periods
  • Activities performed outside of scheduled working hours such as paperwork or training
  • Unpaid travel between patient homes

Meal Periods

When unpaid meal periods are provided, the employee must generally be completely free from work duties during the period. One problem pointed out by the Littler Report is automated time clocks that deduct the meal period automatically. Especially in healthcare situations, it’s not unusual for employees to get called to duty during their meal breaks.

Best practices to minimize these risks include recording, enforcing, and auditing meal periods, says the Littler Report. Its suggestions:

  • Ask employees to certify whether they received an uninterrupted 30-minute consecutive meal period break.
  • Provide a reporting mechanism for missed and interrupted meal periods.
  • Provide method to pay any extra compensation that may be due.
  • Require nonexempt employees to clock out and clock in to establish a clear record of the meal period.

In tomorrow’s Advisor, more from the Littler Report, plus an introduction to the amazing “50×50”—50 Employment Laws in 50 States.