Federal court orders Maryland assisted-living facilities to pay $950K in back wages, damages, penalties for willful FLSA violations
FULTON, MD – Despite serving the needs of the elderly at four Maryland assisted-living facilities with high-quality, compassionate care, 27 essential workers fell victim to employers who showed little concern for their well-being or for paying them all the wages they legally earned.
A U.S. Department of Labor Wage and Hour Division investigation in September 2017 found Fair Labor Standards Act violations by International Health Care Consultants Inc., company owner and President Lois Peters and Frank Dickerson, who managed four group homes owned and operated by IHCC in Fulton, Columbia and Mount Airy. The investigation included the following group homes:
- Astoria House at 11584 Scaggsville Road in Fulton.
- Astoria II at 6636 Cedar Lane in Columbia.
- Ashleigh’s Place at 4914 Canvasback Court in Columbia.
- Golden Years Assisted Living at 28928 Ridge Road in Mount Airy.
The division found the employers paid caregivers and technicians less than the federal minimum wage of $7.25 per hour, an FLSA violation. IHCC paid some workers a day rate of $65 per day for 12 hours of work, which equals less than $5.42 per hour. The employers paid other employees $80 a day for 12 hours of work, or less than $6.67 per hour. By doing so, the employers also incurred overtime violations when employees worked more than 40 hours in a workweek.
Additionally, investigators determined that when some employees worked overnight 24-hour shifts, the employer paid only a day rate for 12 hours of work and treated the remaining 12 hours as unpaid sleep or leisure time. IHCC failed to provide adequate sleeping facilities to many employees, and required them to respond to residents’ needs during the sleep and frequently interrupted leisure time. IHCC’s failure to pay workers for any of that time led to additional FLSA minimum wage and overtime violations.
The division found IHCC was aware of its obligation to pay the required minimum wage and overtime premium but failed to do so. They also violated FLSA recordkeeping requirements by not maintaining adequate and accurate records of their employees.
Following the investigation, the department’s Office of the Solicitor in Philadelphia filed a lawsuit in October 2018 alleging the employers violated the FLSA minimum wage, overtime and recordkeeping provisions.
On April 21, a consent judgment entered by the U.S. District Court for the District of Maryland resolved nearly four years of extensive litigation. The court’s final order requires the employers to pay $466,642 and an equal amount in liquidated damages to the 27 current and former employees, as well as a $16,716 civil money penalty for the willful nature of the overtime violations. The court also enjoins the employers permanently from violating the FLSA.
“The significant amount of money due to just 27 employees indicates that these employees worked very long hours, often with little or no sleep at all during their shifts. Employers must not be allowed to profit by unfairly paying its workers, whose hard work and commitment make them successful,” said Wage and Hour Division District Director Nicholas Fiorello, in Baltimore. “We remain steadfast in ensuring essential protections for essential workers, and providing clear, confidential compliance assistance to any worker or employer with questions.”
“Our attorneys worked tirelessly for nearly four years of contentious litigation pursuing back wages, liquidated damages and injunctive relief, to ensure these essential workers were paid all of their hard-earned wages,” said Philadelphia Regional Solicitor Oscar L. Hampton III. “We held Peters, Dickerson and IHCC accountable for willfully violating the law. This case serves as an example to other assisted-living employers that shortchanging wages comes at a high cost.”
The division’s Baltimore District Office investigated this case, and the department’s Office of the Solicitor in Philadelphia litigated the case.
In December 2021, the Bureau of Labor Statistics reported that the 679,000 healthcare and social services workers left their positions. As the aging U.S. population grows and demand for home healthcare services increases, employment in a variety of healthcare sectors is projected to grow 16 percent from 2020 to 2030 – faster than the average for all occupations – adding about 2.6 million new jobs. These trends indicate that industry employers will find it more difficult to recruit and retain without being highly competitive and ensuring compliance with law governing workers’ rights.