Home care company agrees to pay $7.5M to settle drive-time claims
- A Georgia-based company that provides non-medical in-home care to the elderly and those with disabilities has agreed to pay $7,727,500 to settle class claims under state law that it did not pay its workers for the time they spent driving to multiple clients in a work day (Anderson, et al. v. Southern Home Care Services Inc. and Res-Care Inc., No. 1:13-cv-00840, (N.D. Ga., Oct. 26, 2018)).
- Southern Home Care Services Inc. had classified the workers as exempt under the Fair Labor Standards Act companionship exemption until Jan. 1, 2016, when the U.S. Department of Labor changed its regulations to prevent third-party employers from using the exemption. SHCS paid workers based on the amount of time they spent in a client's home or running errands for the client, at rates ranging from $10 to $14 an hour. The plaintiffs said they were not paid for "drive time" between clients and were entitled under Georgia law to at least $5.15 an hour for such time. The defendants said the plaintiffs were paid for drive time consistent with the Georgia Minimum Wage Law based upon the pay they received on a weekly basis.
- Attorneys for the class asked the court on Oct. 26 to approve the settlement. The class is estimated at 9,400 individuals.
The Fair Labor Standards Act sets standards for minimum wage, overtime, recordkeeping and youth employment for employees who are covered by the act. Employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 a week in order to be exempt from the law's overtime requirements. Job titles and employer or employee preference do not determine exempt status.
Employers often get themselves into trouble by "messing up on the overtime requirement," Katherine L. Fechte, an associate at Greensfelder, Hemker & Gale in St. Louis has said. A lot of employers wrongfully assume that their employees are exempt from overtime, she said. Fechte said job descriptions listing the employers as exempt are not enough, employees have to be exempt under the FLSA.
And if that wasn't enough, many states and cities have their own requirements, as Anderson illustrates. Employers must ensure that employees receive the most generous entitlement, but also that they're in compliance of all provisions of each applicable law; this can require meeting two separate notice-posting requirements, for example.
Employers who suspect they have made FLSA mistakes under the FLSA can avoid litigation or a DOL investigation by self-reporting violations through the new Payroll Audit Independent Determination (PAID) program, Fechte said. The program can't resolve state claims, however, and some experts have expressed concern that participation could paint targets on employers' backs, at least in states that have spoken out against the program.