Overview    Background    Survey Approach    Survey Findings
Comparison to 1997 Nursing Home Baseline Results


In fiscal year 2000, investigators from the Employment Standards Administration’s Wage and Hour Division investigated 136 nursing 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 effort—the second such measurement in the nursing home industry—is a component of Wage and Hour’s overall strategic plan under the Government Performance and Results Act.

The 2000 Nursing Home compliance survey found the following:

  • The level of compliance with FLSA minimum wage, overtime and child labor provisions in 2000 was 40 percent (55 of 136).
  • Eight-four percent (84%) of employers found in violation of the FLSA violated the overtime regulations .
  • Fifteen percent (15%) of facilities investigated were in violation of the child labor provisions. One hundred and eight (108) minors were found illegally employed in 20 facilities.


The mission of the Wage and Hour Division is "to achieve and promote 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. Nationally, these industries include garment manufacturing, agriculture and health care.

Beginning in 1997, Wage and Hour’s efforts to promote FLSA compliance in the health care industry have been concentrated in the long-term care segment of the industry, which typically includes nursing homes, adult family care facilities, assisted living facilities, group homes and home health care. In 1997, Wage and Hour conducted the first investigation-based survey of nursing homes and other personal care facilities. That first survey found that 70% of nursing homes were in compliance with FLSA requirements in the employment of their low-wage workforce.

Survey Approach

The 2000 compliance survey consisted of two components—a nationwide randomly selected sample of skilled and intermediate care facilities, which comprised the main survey sample, and a random selection of facilities that had been investigated in the past and found to have violations ( i.e., the recidivism sample). The main random sample consisted of 136 establishments and the recidivism sample consisted of 58 cases.

In each of the 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

Summary of Results

  • Of 136 investigations completed in the main survey sample, 81 disclosed minimum wage, overtime, and/or child labor violations yielding an overall level of compliance of 40 percent.
  • Violations of the FLSA overtime provisions were the most frequent violation (84 percent of violators had overtime violations). Minimum wage violations were found in 11 percent of the investigations that had violations, while child labor violations were more frequent at 25 percent.
  • Most overtime violations occurred because the employer misclassified workers as exempt administrative or professional personnel. On the other hand, more employees were due overtime back wages because their employer did not compensate them for hours worked during their meal periods. The total amount of back wages due for overtime violations was also greatest for uncompensated meal periods. Other overtime violations occurred when employers failed to include bonuses or shift differential payments into the employees’ regular rate of pay (base rate for "time-and-a-half" computation); paid straight time for overtime hours worked; and, failed to pay for pre- and post-shift work.
  • Minimum wage violations tended to occur most often when the employer illegally deducted the cost of uniforms from their workers’ pay.
  • Most minors found illegally employed were working as dietary aides or food service workers. And most child labor violations occurred because the minors were working either too many hours or too late in the evening. Six minors were found in violation of the child labor hazardous occupation orders (HOs) prohibiting minors from operating power-driven dough mixing or meat slicing equipment.
  • Over $432,000 in minimum wage and overtime back wages were found due 1,576 employees.
  • Certified nurses assistants were most commonly found to be the subject of violations. Dietary aides and other food preparation staff were next in frequency, followed by maintenance workers. Other care providers—licensed practical nurses and registered nurses—were also the subject of violations.
  • Forty-one percent (41%) of the 58 companies in the recidivism sample (companies investigated and found in violation in the past) were now in compliance. Of the companies still in violation, most (70%) were found with violations of a different nature. Fewer (30%) were found violating the law in the same manner as in the prior investigation.

Comparison to 1997 Nursing Home Baseline Results

The 1997 nursing home investigation-based compliance survey established a 70 percent baseline level of industry-wide compliance. The parameters of the 2000 compliance survey are somewhat different than those used in the 1997 survey and a precise comparison is difficult. However, the results still suggest a decrease in overall FLSA compliance among nursing homes nationwide. 1

2000 Nursing home percent in compliance results are lower than 1997 baseline. 2000 = 40%. 2000 adjusted = 55%. 1997 adjusted = 67%. 1997 baseline = 70%.

In violation cases, the percentage of nursing homes with child labor violations jumped from 18 percent in 1997 to 25 percent (20 of 81) in 2000. The percentage of firms with overtime violations remained fairly constant at 84 percent of those companies with violations compared to 81 percent in 1997. Minimum wage violations dropped slightly from 13 percent to 11 percent.

The nature of the overtime violations shifted somewhat from regular rate issues in 1997 to misapplied FLSA exemptions in 2000—most likely as a consequence of expanding the scope of the survey to include all employee occupations.

Nature of Overtime Violation in Descending Order of Frequency

1997 Baseline

2000 Measure

Improper Calculation of Regular Rate of Pay

Misapplied "541" Exemption

Failure to Compensate for All Hours Worked

Improper Calculation of Regular Rate of Pay

Employee Paid Straight Time for Overtime Hours Worked

Failure to Compensate for All Hours Worked

Misapplied "541" Exemption

Employee Paid Straight Time for Overtime Hours Worked

Certified nurses assistants and dietary aides were again the occupations most likely to be subject of a violation.


1 Changes in the compliance survey methodology led to survey parameters and reporting criteria that are somewhat different than those employed in the 1997 baseline. The 1997 baseline, for example, was limited to six low-wage occupational categories. The 2000 survey included all workers-even those in presumed high-wage occupations-employed in nursing homes. And, public sector nursing homes were excluded from the 1997 survey, but were included in the 2000 effort.

If the survey results are normalized for comparison purposes, then the original baseline would have been reported as 67 percent compliance (rather than 70 percent). The adjusted (or comparable) compliance rate for the 2000 survey would then be 55 percent (excluding as violation cases those investigations that found violations for presumed higher-wage occupations only and excluding all public nursing home facilities)-a decrease of 12 percentage points