A number of Small Business Administration’s Paycheck Protection Program loan recipients have previously engaged in wage theft, according to a data analysis review by news outlet The Raw Story.
One cited firm is Hearth Management, which manages assisted living communities in four states. The firm received a PPP loan in the range of $5 million to $10 million, according to COVID Stimulus Watch data. That’s despite Hearth Management previously paying out a total of $383,000 in wage theft penalties at several locations, according to the investigation. In 2019, for example, Hearth Management agreed to pay $81,008 in back wages and liquidated damages after the Department of Labor’s Wage and Hour Division determined that sales employees at one of the firm’s communities in Tennessee should have been classified as nonexempt.
Although The Raw Story noted that it is not illegal for employers with histories of wage theft penalties to apply for and receive PPP assistance, the media outlet argued that PPP employers with histories of wage theft penalties should be subject to additional scrutiny both by the Wage and Hour Division and the Small Business Administration.
Hearth Management told McKnight’s Senior Living that The Raw Story analysis mischaracterized a situation in which the firm proactively remedied wages to the benefit of its teams in collaboration with the Department of Labor.
“The Hearth Management continues to work tirelessly to provide a great place to work and in turn a premier senior living experience,” said Jonathan Barbieri, the firm’s senior vice president. “As we navigate COVID-19, we are proud of our industry-leading rapid response placing the safety and well-being of our residents and teams above all else. Our commitment to those we serve is unwavering.”
