The continued wave of FLSA lawsuits shows an alarming trend and emphasis on wage and hour related disputes both in the private and federal enforcement contexts. In fiscal year 2017, the Department of Labor, Wage and Hour Division reportedly collected an average of $740,000 in back wages for workers per day. (https://www.dol.gov/whd/data) In the context of private litigation, the top ten most expensive FLSA lawsuits for 2017 reported amounted to over $180 million. (https://blog.tsheets.com) And, while the healthcare industry was fortunate to avoid this particular “top 10” list, it is far from insulated from wage and hour lawsuits in a variety of contexts
A. FLSA – Automatic Meal Deductions
Fundamental to wage and hour law is the FLSA’s requirement that employers must pay for all hours which it suffers or permits an employee to work. Meal breaks of at least thirty minutes in duration may be excluded from “hours worked” and therefore unpaid if employees are completely relieved of duty for purposes of eating a meal. Many organizations utilize automatic deductions for regular meal periods, an increasingly dangerous practice, particularly in the context of patient care workers in the healthcare setting. Many times employees, with mounting success, recall frequent and lengthy interruptions in their meal breaks to tend to patient needs and the employer is left to try to prove the contrary. Two recent cases illustrate such scenario, but expanded into the context of collective (or class) actions.
Ridley v. Regency Village Skilled Nursing & Rehab Center, (March, 2018). The plaintiffs claimed to be a group of “similarly situated” employees for purposes of class or collective action treatment because they all provided direct patient care and were all subject to the same policy surrounding meal breaks. The class included licensed vocational nurses, registered nurses, certified medical assistants, and certified nursing assistants. Regency’s timekeeping software automatically deducted thirty minutes for lunch breaks. The plaintiffs alleged that Regency knew that the staff often worked through lunch breaks and expected them to do so. The court recently declined to dismiss the lawsuit, as the allegations gave rise “to a plausible claim for relief.” Further, citing the plaintiffs’ evidence that they were subjected to interruption during their lunch breaks, the court granted conditional certification of the class/collective action.
Myers v. Marietta Memorial Hospital, (September, 2017). Plaintiffs alleged that the hospital’s policy of automatically deducting thirty minutes for a meal break for nurses and patient care technicians violated the FLSA. Importantly, the hospital had established policies by which employees could cancel the automatic deduction when unable to take an uninterrupted meal break. Nonetheless the court granted class certification because the evidence demonstrated that employees were at times not even scheduled for lunch breaks, managers were aware that employees were working through the breaks, and managers were actively discouraging employees from canceling the automatic deductions.
B. FLSA – Exempt from Overtime
Kelly-Myers v. Mercy Health System of Se. Pennsylvania, (September, 2017). The plaintiff, a former patient service representative, was promoted to office manager. She filed suit alleging that the health system failed to pay her overtime after the promotion. Despite the plaintiff’s claim that she spent over half of her time on clerical work, the court determined that she was properly classified as “exempt,” as her “primary duty” was the general business management of a physician practice office that required independent judgment. Thus, she fell under the administrative exemption from payment of overtime.
WHD Opinion Letter 2018-7 (January, 2018). Recently, the DOL issued an opinion letter to clarify its position relative to how a particular full day deduction could be made from an exempt employee’s salary without risk of losing the exemption. In the scenario addressed, a registered nurse was paid a salary to be on call and available for surgery from 2:30 p.m. on Friday to 6:30 a.m. on Monday. The RN was not paid extra compensation when she was called to the hospital for surgery. The hospital requested DOL’s opinion as to the proper method for making a deduction from the RN’s salary when the RN is not available to be called for all hours either on a Friday, Saturday, or Sunday. The DOL cited its regulation 29 C.F.R. § 541.602(c), which states:
[w]hen calculating the amount of a deduction from pay allowed under paragraph (b) [pertaining to permissible full day deductions] of this section, the employer may use the hourly or daily equivalent of the employee’s full weekly salary or any other amount proportional to the time actually missed by the employee. A deduction from pay as a penalty for violations of major safety rules under paragraph (b)(4) of this section may be made in any amount.
According to the DOL, under the express terms of section 541.602(c), an employer may calculate a deduction for a full-day absence based on the number of hours actually missed. Thus, for example, if the RN was scheduled to be on call Friday from 2:30 p.m. to midnight, but was unable to work any hours that day for one of the reasons described in section 541.602(b), the hospital could deduct 9.5 hours from her salary (i.e., the amount actually missed) in accordance with section 541.602(c). The DOL reminded the employer, though, that deductions would not be permissible if the employee was absent for less than one full day of work.