A Pittsburgh-based healthcare services provider for people living with dementia or disabilities misclassified two workers as independent contractors, resulting in a recovery of $98,620 in back wages by the federal government.
Due to the misclassification, Sunrise Residential Care Services did not pay the workers an overtime premium, according to the US Department of Labor’s Wage and Hour Division. Sunrise also did not maintain a record of daily and weekly hours worked or identify accurate pay rates on payroll records for the two employees, the DOL stated.
As a result, the department recovered $49,310 in back wages, and the same amount in liquidated damages.
Sunrise operates 10 residences in the greater Pittsburgh area.
“Failing to properly classify workers as employees and not independent contractors denies them from receiving all of their hard-earned wages, benefits and protections under federal law,” Wage and Hour Division District Director John DuMont said in a statement. “We can assist employers and workers in determining if a worker should be classified as an independent contractor or as an employee.”
The Labor Department is expected to publish a final rule on independent contractor status in October, five months later than previously planned. The proposed rule would more strictly limit how healthcare and other employers classify workers who are paid on an hourly basis under the Fair Labor Standards Act.
A coalition of 17 healthcare associations earlier this year urged the DOL to exempt long-term care and other healthcare providers from the proposed rule. The group called the rule “problematic” and said it could exacerbate ongoing labor shortages across the industry. The organizations urged the federal government to reevaluate the rule with healthcare in mind.