Overview    Background    Survey Approach    Survey Findings
Overtime    Child Labor    Minimum Wage    Affected Occupations


During the Spring of 1997, investigators from the Employment Standards Administration’s Wage and Hour Division completed 288 investigations of skilled/intermediate care nursing homes and other personal care facilities to determine the level of compliance with the minimum wage, overtime and child labor provisions of the Fair Labor Standards Act (FLSA). This initiative – undertaken pursuant to the agency’s strategic goal to increase compliance in low-wage industries – is a component of Wage and Hour’s overall strategic plan under the Government Performance and Results Act.

The Nursing Home Compliance Survey yielded the following information:

  • Seventy percent (70%) of nursing and other personal care facilities surveyed were in compliance with the FLSA.
  • Eighty-three percent (83%) of those employers found in violation of the FLSA violated the overtime regulations.
  • Nearly 20% of the nursing homes violated the FLSA’s child labor provisions.
  • Two-thirds (66%) of the 161 firms that had not been previously investigated by Wage and Hour were in compliance while over three-fourths (76%) of 127 firms previously investigated (and found in violation) were in compliance.


The mission of the Wage and Hour Division is "to achieve compliance with labor standards through enforcement, administrative and educational programs to protect and enhance the welfare of the Nation’s workers." The agency develops its strategic plan with a principal goal of achieving compliance in specified targeted low-wage industries. In 1997, the health care industry was added to garment manufacturing and agriculture as one of three nationwide sectors in which Wage and Hour concentrates its efforts.

Changes in an industry and its workforce demographics and enforcement history data are foremost in determining industries on which the agency focuses. For the nursing home industry, those factors included:

  • The aging of the American population and the increased demand for long-term health care with commensurate growth in the number of establishments and total employment;
  • The preponderance of low-wage occupations like nurses’ assistants, laundry personnel, food preparation workers, and clerks; and
  • Wage and Hour enforcement statistics demonstrating only a 40 percent FLSA compliance rate.

Survey Approach

The compliance survey was designed to enable Wage and Hour to:

  • Determine the overall level of FLSA compliance in the low-wage segment of the nursing home industry;
  • Measure the effectiveness of prior Wage and Hour interventions; and
  • Establish a baseline level of compliance from which future educational and enforcement efforts could be designed and their effectiveness measured.

Prior to conducting the nursing home survey, the Department conducted extensive education and outreach with stakeholders in the nursing home industry:

  • Employer associations;
  • Employee representatives;
  • Industry advocacy groups and other interested parties.

The Department discussed the criteria for targeting the nursing home industry; explained the procedures for conducting the investigation-based survey; and provided industry facts sheets and other compliance materials. The stakeholders, in turn, provided feedback and extended their cooperation.

A random sample of two hundred (200) from a nationwide listing of nursing homes was combined with an additional one hundred (100) establishments randomly chosen from a list of nursing homes previously investigated by Wage and Hour. The investigations focused on FLSA compliance for specific low-wage occupations in the industry – nurses assistants and activities aides, and dietary, maintenance, and clerical staff. Only those firms found to have been improperly paying low-wage employees in these job categories or illegally employing young workers were deemed to have been found in violation for purposes of this survey.

In each of the 288 survey cases completed, Wage and Hour investigators visited the establishment; met with the employer or his/her representative; reviewed pertinent records and interviewed employees. The results were then analyzed to determine what, if any, particular patterns of violative behavior were common in the industry.

Survey Findings

Of the 288 facilities investigated, 86 (30%) had FLSA violations – yielding an overall industry compliance rate of 70 percent, nearly twice the 40 percent compliance rate suggested by Wage and Hour’s historical enforcement data. [Note: Wage and Hour enforcement statistics are often biased because roughly 70% of investigations are conducted as a result of a complaint alleging violations. Consequently, these data will suggest violation rates higher (or compliance rates lower) than those more likely for an industry as a whole.]

Seventy-six percent (76%) of companies (96 of 127) that Wage and Hour had investigated (and found in violation) in the past were now in compliance. Only 8 percent of those previously investigated companies were found repeating the same violative behavior disclosed in the earlier investigation. Sixty-six percent (66%) of the nursing homes investigated for the first time (106 of 161) were found in compliance.

Fifteen of the 288 facilities investigated were assisted living-type establishments. Ten of the 15 were found in compliance.

For the minority of firms found in violation, violations of the FLSA overtime provisions were by far the most frequent problem, followed by violations of the child labor and minimum wage requirements.


The Department found FLSA overtime violations in 83 percent (71 of 86) of the nursing homes where violations of some kind were found. The greatest number of overtime violations occurred because employers improperly calculated employees’ regular rates of pay (base rate for "time-and-a-half" computation). Other common causes of overtime violations were:

  • Failure to compensate for all hours worked.
  • Payment of straight time wages for overtime hours worked.
  • Misapplied overtime exemptions.
  • Use of "comp-time" instead of overtime pay.

Child Labor

Nineteen percent (19%) (16 of 86) of the investigations where violations were found disclosed child labor violations. Most occurred because 14- and 15-year-olds worked outside of the allowable hours of work. There were some violations involving hazardous occupations.

Minimum Wage

In 13% (11 of 86) of the nursing homes where violations were found, some low-wage employees were not paid the minimum wage. These violations occurred in large part because the employer:

  • Paid a salary that was so low it failed to cover all hours worked at the minimum wage.
  • Failed to pay for all hours worked -- usually time spent before an employee’s shift began or missed or interrupted meal breaks that were unpaid.
  • Illegally deducted money from the employees’ pay.

Affected Occupations

Of the low-wage occupations surveyed, nurses assistants most commonly were the subject of violations. Other classifications subject to violations were:

  • Dietary and food preparation workers
  • Activities aides
  • Groundskeepers
  • Clerical
  • Laundry/Dry-cleaning