Hospitals Face Wage and Hour Law Scrutiny

John Commins, for HealthLeaders Media , March 16, 2011
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Hospitals are facing enhanced scrutiny from the federal government for Fair Labor Standards Act wage and hour law compliance.

The U.S. Department of Labor served notice early last year when it announced that less than 36% of healthcare employers that it audited in New York State were in compliance with the FLSA dating back five years. Federal auditors determined that 4,702 healthcare workers in the Empire State were owed a total of $2.2 million in back wages, an average of $468 per employee.

While the settlements for individual employees usually don’t add up to more than a few hundred dollars, the payout by hospitals and health systems can be substantial. In 2009, for example, Partners HealthCare Systems Inc. paid 700 employees more than $2.7 million in overtime back wages after the Boston-based provider self-reported FLSA overtime violations.

Stephanie Dodge Gournis is a Chicago-based attorney with Drinker Biddle & Reath LLP, and a specialist in labor law. She says federal auditors are no longer ignoring traditional industrywide practices in healthcare that are non-compliant with federal wage and hour laws. “In the past, the Department of Labor wasn’t as aggressive in enforcing, or quite frankly wasn’t as knowledgeable as to where some of the skeletons were hiding in the healthcare closet. That’s changed,” she says.

Potential litigation threats for hospitals include failure to aggregate work hours at affiliated hospitals, interrupted meal breaks, and improper overtime calculation.

Hospitals pose a particular challenge for wage and labor compliance because staff is on duty 24/7, she says. Second- or third-shift workers, for example, often punch in late at night and work through midnight and into the next day, and many hospitals designate workers’ hours to the day of the clock-in.

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