{Read in 7 minutes} At the end of November, we filed a lawsuit entitled Mathis v Educare Community Living Corp, et al. Educare is a large community living corporation that does business in the United States. It’s a division of the ResCare Corporation, which provides all kinds of home health-aide services.
What’s unique about this business model is that many, if not all, of these communities and residences are owned by the corporation. Unlike a home health-aide who may be sent to a patient’s home, sometimes residing with that patient and/or directly employed by that patient, taking care of them overnight or in 12 hour shifts, etc., Educare and ResCare employ the aides. They are employed for the patients living in the community, sometimes directly, sometimes through Medicare or Medicaid.
In that situation, aides — like any other employees in this country — are entitled to overtime pay when they have worked more than 40 hours in a week. Aides in the private setting, possibly living in the home, are paid by a patient directly and not entitled to overtime because they are being given room and board, etc. as part of their employment.
In the community, aides are coming and going, working a 12-hour shift and then being replaced by another aide. They are not being paid by the patient, which is the important point under this exemption of the law which says these aides are entitled to overtime.
The lawsuit has been filed in the Federal Court in the Eastern District of Texas, but it’s a nationwide class-action suit. We have researched many, many schedules and pay records where these aides are scheduled to work a seven-day week. In our case, the people that we represent worked, for example, Tuesday through Monday. They’re working 12 hours a day, which certainly adds up to over 40 hours a week. But when we looked at their paychecks, they are not being paid the time-and-a-half rate for the hours worked over 40. The employer is splitting the time worked between two weeks, which is sometimes referred to as “killing overtime.”
We see this in many different settings, not just home health care aides. What we typically would see is an employee on a bi-weekly pay cycle being told, “Work 50 hours this week and 30 hours next week,” and then they don’t pay them any overtime. That is illegal. For any 7-day week when an employee works over 40 hours, they have to be paid the overtime rate for those hours. An employer can’t say, “Take a couple days off next week to make up for the time you did this week.“
In the Educare case, the work week really is Tuesday through Monday, so it is not over a two-week pay period. The company is paying the aides on a bi-weekly basis, but they’re scheduling them one week at a time. This means that under the Fair Labor Standards Act (FLSA), the actual work week is Tuesday through the following Monday. At 12 hours a day, three-and-a-half days into the seven days the employee is already over 40 hours and should be getting paid overtime from that moment forward. Educare is paying a couple hours of overtime, and then recalculating as if the clock starts over again on Saturday. They are picking a new day to begin the work week, which is illegal.
In New York, an employee who works a 12-hour day for 7 days in a row is entitled to additional pay. That is a state law here in New York, which doesn’t apply in Texas where this case is filed. We do believe, however, that because this is a uniform policy that we see through payroll and reporting time sheets, it is a policy that’s being followed by Educare everywhere it does business.
Though we haven’t heard from them on the case we just filed, they have been sued for similar infractions in the past. Despite these infractions and lawsuits, they don’t seem to change their practices, but rather try to come up with a new way to get around it, which is what we think is happening in this new wave of cases that we have. In the past, it looked like they were following that killing overtime method where they would give a couple of days off in the second pay period to try to balance it out to a total of 80 hours, or 40 hours a week. Fortunately, they got caught for that and were sued.
Now they are essentially re-designating the work week to try to get around it in a different way, but it is still a violation of the law. The employees who make close to minimum wage — $8- $9 an hour — take these jobs thinking they will make up for that low rate when they are getting $12 an hour for all the hours over 40, but that is not happening.
What is wrong with paying people what they’re worth?
A lot of the money being used to pay these employees is coming through Medicare and Medicaid, which provide more than enough money to compensate employees properly. From our perspective, denying overtime is just a scheme for Educare to pocket that money, violating the law.
The employees will minimize it, but being a caregiver is a tough and dirty type of job when you’re caring for a person around the clock and seeing to all of their needs. It can be especially challenging if the client is:
- Disabled
- Mentally impaired
- Elderly
- Very, very sick
From our perspective, denying overtime is just a method of skimming the pot to make more money for the corporation at the expense of an employee who’s just trying to put in a good day’s work.
Once the government realizes this, it may jeopardize Medicare and Medicaid reimbursements because the government expects that the employees providing this care are being paid properly.
There may also be some issue of discrimination, because many of the employees who work for these wages are minorities. When a company is looking to save a couple of bucks, they usually look to women and minorities first.
We would like to reach out to anyone who may work in these types of facilities who is not clear on their rights with regard to their wages. Please feel free to contact us to get the information you need to be sure you are being paid appropriately for the work you do.
James A. Vagnini
Partner
email: [email protected]
