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Home Healthcare Agency Pays Over $500K Based on Worker Misclassification

    Client Alerts
  • November 17, 2023

In recent years, the Department of Labor’s Wage and Hour Division has increased enforcement activities in the home healthcare industry. On Tuesday, DOL announced recovery of over $500,000 from an Alabama agency found to have misclassified its healthcare workers as independent contractors. DOL accused the agency of paying straight-time overtime instead of time and one-half of their wages as well as failing to keep accurate records of hours worked.

DOL said that in its last fiscal year, it conducted over 1,100 investigations of home healthcare agencies nationwide. In addition to worker misclassification, these investigations have also involved failure to pay for travel time and short breaks in addition to other violations of the Fair Labor Standards Act.

Beyond FLSA issues, worker misclassification can result in a number of claims relating to payroll tax withholding, failure to provide unemployment and workers’ compensation insurance, and claims for employee benefits. In the home healthcare and other industries, the requirements for proving independent contractor status are strict and mean workers must exercise a significant degree of independence in the scheduling and conduct of work tasks performed.

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