Four home care operators in Portland, Maine, were indicted on counts of wage fixing and labor market allocation charges, the U.S. Department of Justice (DOJ) announced Friday. And there could be a lot more where that came from.
On a webinar last week, Littler Mendelson lawyers covered five legal trends to watch in 2022. Three of them were regarding wage-and-hour concerns.
The allegations suggest the owners were restricting their personal care workers from leaving to other agencies by conspiring with each other to fix wages. In the end, the alleged actions resulted in taking money out of the workers’ pockets amid the public health emergency (PHE).
The charges were the result of an “ongoing federal antitrust investigation into wage fixing and worker allocation in the home health industry,” according to the DOJ announcement. That suggests more of these cases could soon arise – particularly in the Northeast.
“People in Maine have suffered real hardships because of the pandemic, especially frontline health care workers, and we will fully investigate allegations of exploitation,” Joseph R. Bonavolonta of the FBI said in a statement.
The maximum penalty for such charges is up to 10 years in prison and a fine of $1 million for the individuals allegedly involved.
Other home-based care agencies should be prepared for similar legal issues, Joshua Vaughn, a shareholder at Littler Mendelson, said on the legal trends webinar.
Vaughn, who specializes in home-based care and wage-and-hour litigation, said that the amount of employees bringing charges to the U.S. Equal Employment Opportunity Commission (EEOC), the U.S. Department of Labor (DOL) and other state agencies has skyrocketed. As have subsequent lawsuits against home-based care agencies.
“We’re seeing employees feeling more and more comfortable suing both their current and former employers,” he continued. “It used to be a very taboo thing, and it used to be largely – if not predominantly – the former employees who were trying to bring that sort of claim. But now we’re seeing current employees. I can’t tell you the number of lawsuits I’m defending with current employees, and it creates a bit of awkwardness. But it’s happening.”
Wage-and hour-changes due to the PHE – such as relief funding and the Paycheck Protection Program (PPP) – also muddied the waters.
Employment lawyers have taken advantage of that, and home-based care workers are being targeted as plaintiffs.
“Lots of my clients tell me, ‘Oh, no, that employee is fine. They’re not a problem. We can do whatever we need to do. They’re not going to sue me,’” Vaughn said. “And I always remind them, they’re happy now, but as soon as they don’t get the promotion or raise, or they hear about a friend getting more money down the street, … that happy-go-lucky employee turns into your next litigation risk. So please be aware, if you think employment issues are not a concern.”
Class- and collective-action lawsuits are another emerging concern. Whereas lawsuits were once typically brought by a single disgruntled employee over $500, multiple employees are now coming together to bring a larger lawsuit against a current or former employer.
One employee lawsuit over, say, $500 may cost an agency that amount plus the plaintiff’s lawyer fees. But in a class lawsuit, those fees can pile up.
“Think about taking $500 or $1,000 worth of damages, and multiplying it by the number of caregivers you have,” Vaughn said. “You can see how quickly damages can grow when we’re dealing with a class or collective action.”
Wage-and-hour gripes can be easily found, Amber Spataro, another shareholder at Littler Mendelson, said. That’s especially true if an employer doesn’t have its ducks in a row when it comes to payment policy.
“You have to show a common policy, and that’s where the handbook expertise comes in,” Spataro said. “Sometimes I see these handbooks with one little sentence or one little common policy that causes a massive wage-and-hour violation.”
For instance, if payday regularly falls on a Saturday, an employer may pay that out on a Friday, whereas if it falls on Sunday, it’ll pay out on Monday.
But in some states, that adds up to a wage-and-hour violation and will mean the employer is paying late, which can lead to significant fines. In New Jersey, for example, there’s up to 200% in liquidated damages if an employee is paid late, Spataro said.
Again, if that is added up and then multiplied by, say, 100 employees, the fines can become seriously detrimental.
“That’s why your handbook needs to be up to speed and have all the correct policies in place,” Spataro said.
Companies featured in this article:
