Assisted Living Facility Miss-Classifies Employees As Independent Contractors: Owes $56,000.00 To Nine Employees

Written by: Don Benson, Esq.

The U.S. Labor Department announces in a March 16, 2016 press release that a Tampa assisted living facility must pay more than $56K in back wages to nine employees.  Two employees were miss-classified  as independent contractors. Seven other employees were miss-classified as exempt and paid on a salaried basis without over-time pay.

Toria’s Support Care Services violated the minimum wage, overtime and record keeping provisions of the Fair Labor Standards Act. The employer miss-classified one maintenance worker and one care provider as independent contractors instead of employees, and failed to pay them the federal minimum wage and overtime.

The employer also improperly paid other employees flat salaries without regard to how many hours they worked. In some instances, these salaries failed to cover the federal minimum wage of $7.25 per hour, and when employees worked more than 40 hours in a week the employer failed to pay them legally required overtime. Simply paying an employee a salary does not necessarily mean the employee is not entitled to receive minimum wage and overtime.

Quote: “This industry employs some of the most vulnerable, low-wage workers we see,” said James Schmidt, the Wage and Hour Division’s district director in Tampa. “Misclassification is particularly harmful to these workers, as it cheats them out of the benefits and protections they’re legally entitled to as employees. Unfortunately, we are seeing too many employers using this practice in an attempt to lower their labor costs. We continue to use all available resources to end this practice and to ensure that these workers, and others like them, bring home every cent they have rightfully earned.”

The Wage and Hour Division has made it a point of emphasis to examine whether independent contractors are actually miss-classified employees. The test can be hard to predict in some factual scenarios, but the DOL and Courts will be examining whether:

1) The extent to which the work performed is an integral part of the employer’s business.

2) Whether the worker’s managerial skills affect his or her opportunity for profit and loss.

3) The relative investments in facilities and equipment by the worker and the employer.

4) The worker’s skill and initiative.

5) The permanency of the worker’s relationship with the employer.

6) The nature and degree of control by the employer.

Obviously in situations where patient care is paramount the “nature and degree of control by the employer” will be detailed and extensive so that the employer may have a hard time classifying the workers as independent contractors under this test.

As more of these DOL press releases gain attention among such workers, the prudent employer in the long term care industry will proactively re-examine its practices concerning who is classified as an independent contractor and who is treated as a salaried exempt employee. There may be paperwork and documentation that will help establish the independent contractor status and show the discretion and authority required for an exempt status under the DOL Regulations.