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Secretary of Labor Thomas E. Perez
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News Release

WHD News Release: [04/19/2012]
Contact Name: Scott Allen or Rhonda Burke
Phone Number: (312) 353-6976 or x26976
Release Number: 12-0692-DAlK

Avera McKennan in South Dakota to pay more than $70,000 in back wages to nearly 500 health care workers following US Labor Department investigation

LOS ANGELES — Avera McKennan Hospital and University Health Center in Sioux Falls has agreed to pay $70,157 in back wages to 487 current and former employees at 12 of its health care facilities after an investigation by the U.S. Department of Labor's Wage and Hour Division found employees were not compensated correctly for work breaks, in violation of the overtime provisions of the Fair Labor Standards Act.

"All employees deserve full and fair compensation for all hours worked," said Cynthia Watson, regional administrator of the department's Wage and Hour Division in the Southwest. "Health care workers are some of the lowest paid in the nation. The FLSA provides protections not only to workers, but also to employers who depend on the Labor Department to ensure that no company receives an unfair advantage by dodging the law. Similar facilities should take notice and ensure that their policies are in compliance with federal law."

Investigators found that Avera McKennan deducted time from employees' hours for meal and rest breaks that were less than 30 minutes in duration. Because the breaks were not counted toward employees' total weekly hours, the employees were not correctly compensated for overtime hours, that is, hours worked beyond 40 in a week. Investigators determined that these violations were systemic throughout the company because all locations operated under the same payroll and timekeeping systems, and applied the same administrative regulations to record time for hourly employees.

Avera McKennan has agreed to comply with the FLSA in the future, provide training for its employees and managers, and program its timekeeping software not to deduct time from employees' hours worked for breaks of fewer than 30 minutes. Avera McKennan is part of Avera Health. Operating in South Dakota, Nebraska, Minnesota, North Dakota and Iowa, Sioux Falls-headquartered Avera Health is one of the region's largest health systems and employs about 5,500 workers.

The department has a smartphone application to help employees independently track the hours they work and determine the wages they are owed. Available in English and Spanish, users conveniently can track regular work hours, break time and any overtime hours for one or more employers. This new technology is significant because, instead of relying on their employers' records, workers now can keep their own records. This and other Labor Department apps are available at http://www.dol.gov/dol/apps.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. In general, "hours worked" includes all time an employee must be on duty, or on the employer's premises or at any other prescribed place of work, from the beginning of the first principal work activity to the end of the last principal activity of the workday. Additionally, the law requires that accurate records of employees' wages, hours and other conditions of employment be maintained.

For more information about the FLSA and other federal wage laws, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243) or the division's Denver District Office at 720-264-3250. Information also is available at http://www.dol.gov/whd/.