$35.8M Judgment Reminds Employers to Ensure Compliance with FLSA

By Nicole Elgin & Lex Shvartsmann
Barran Liebman Law LLP,

In a July 22, 2024 judgment in the U.S. District Court for the Western District of Pennsylvania, 6,000 workers of residential skilled nursing and rehab facilities were awarded $35.8 million in back wages and damages under the Fair Labor Standards Act (FLSA). This is one of the nation’s largest wage recovery judgments under the FLSA for the failure of their employers to abide by FLSA overtime standards. The bench trial resulted from an investigation by the Wage and Hour Division in Pittsburgh finding that the employers:

• Failed to pay employees for all hours worked, including for work performed during meal periods;
• Failed to properly calculate overtime pay, including by failing to include non-discretionary bonuses and shift differentials in calculating an employee’s overtime rate;
• Misclassified employees as exempt from the FLSA’s overtime requirements; and
• Failed to keep accurate records of employees’ hours worked and compensation due accordingly.

The FLSA establishes minimum wage, overtime pay, recordkeeping, and employment standards which both private and government employers must follow. Under these standards, employers are required to properly record non-exempt employees’ time worked and compensate employees for that time. Where hourly non-exempt employees work more than 40 hours in a week, the FLSA entitles them to pay for those hours at a rate of 1.5 times their regular rate of pay. For employees who earn compensation beyond their base hourly rate, employers are required to follow strict rules regarding what other types of compensation must be included in calculating the regular rate of pay (such as non-discretionary bonuses and shift differentials).

Employers should take heed of this historically large recovery judgment and review their own overtime compensation practices to ensure compliance with the FLSA.

For questions on the Fair Labor Standards Act or overtime compensation requirements, contact Nicole Elgin at 503-276-2109 or [email protected].

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