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Wage and Hour Division (WHD)

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Archived News Release — Caution: Information may be out of date.

Press Releases

Date:  April 7, 2015

Contact:  Jose A Carnevali or Leo Kay

Phone:  415-625-2631 or 415-625-2630

U.S. Department of Labor
Wage and Hour Division
Release Number: 15-137-SAN



US Labor Department conducts compliance and enforcement initiative in Bay Area nursing homes, residential care facilities

$6.8 million in wages, damages recovered for more than 1,300 workers since 2011

SAN JOSE, Calif. -- A multiyear compliance assistance and enforcement initiative conducted by the U.S. Department of Labor’s Wage and Hour Division has found that Bay Area residential care facilities and nursing homes have underpaid more than 1,300 workers by millions of dollars.

The agency’s investigations concluded that between 2011-2014 minimum wage and overtime violations resulted in more than $6.8 million dollars in back wages and damages for the workers, money desperately needed to cover basic life expenses, such as rent, food, transportation and child care. Additionally, the initiative has served to level the playing field among the businesses by ensuring compliance with the federal Fair Labor Standards Act.

At the same time, the Wage and Hour Division has worked with business owners, worker advocacy groups and employees to educate the industry on basic federal labor law requirements. However, investigators continued to see widespread abuses where many employers took advantage of workers vulnerable to exploitation because they often don’t know their rights. As a result, they were subject to wage violations and retaliation.

“The hardworking men and women who take care of our relatives and friends need to be compensated fully for their time,” said Ruben Rosalez, regional administrator for the department’s Wage and Hour Division in San Francisco. “We know that rewarding hard work with fair and full pay leads to happier and more productive workers. The trend of violations is therefore not only harming workers, but patients alike who might suffer with less quality care. We will continue to investigate and penalize employers who cheat their employees and gain an unfair competitive advantage over their law-abiding competitors at the expense of their workers.”

Working conditions in some residential care facilities can be difficult for many caregivers. Many of the facilities require employees to stay overnight on the premises to ensure round-the-clock care for patients. Despite the fact that they are on call assisting residents overnight, investigators found that some workers were not paid for such time, and some were denied adequate sleeping facilities and were forced to sleep on the floor. Such conditions can erode the quality of care patients receive.

Additionally, investigators found that employees who are paid hourly often worked 10 to 14 hours per day, six days per week, but were only paid for eight hours per day. Some workers were paid a flat weekly salary regardless of the hours they worked and were therefore denied time and one-half pay for hours worked beyond 40 per workweek. Employees were also threatened and harassed if they questioned their working conditions. Some employees were intimidated or retaliated against by their employers and were instructed not to cooperate with Wage and Hour investigators.

Investigations completed in the past year reflect the disturbing trend in violations. These include:

  • The owners of Retirement Plus of San Carlos and four other Bay-Area facilities paid its caregivers as little as $5 per hour and misclassified one employee as an independent contractor. The employer paid more than $630,000 in minimum wage, overtime and damages to resolve the case.
  • Lake Alhambra Assisted Living Center violated a protective order prohibiting retaliation against caregivers for cooperating with the investigation. Ultimately, the business paid $304,000 in back wages and damages to 32 caregivers, plus $25,000 in civil money penalties, as ordered in a consent judgment filed in the U.S. District Court for the Northern District of California. The order also included the appointment of an independent monitor to ensure the business pays its workers properly in the future.
  • Anne’s Guest Home, which operates six facilities in Pleasanton and Livermore, was found in violation of the minimum wage, overtime, and record-keeping provisions of the FLSA. The company paid some workers below the federal minimum wage of $7.25 per hour and failed to pay overtime at time and one-half for hours worked beyond 40 in a workweek. The firm was ordered to pay more than $447,000 in back wages and damages in a consent judgment filed in the U.S. District Court for the Northern District of California.
  • Farol’s Residential Care Home paid caregivers salaries below the minimum wage in many cases and did not pay overtime when employees worked over 40 hours per week. The business was ordered to pay a total of $405,284 in back wages, damages, interest and penalties in a consent judgment filed in the U.S. District Court for the Northern District of California. Twenty-seven workers will receive back wages in this settlement.
  • Vicky Rebecca Quedado, doing business as We Care ICF/DD-H and Becker Home Inc. of Northern California, operates three intermediate residential-care facilities and will pay $261,356 in back wages and liquidated damages to 21 low-wage workers for violations of the FLSA. The division found that the business paid the workers flat salaries for all hours worked instead of paying them overtime when they worked more than 40 hours in a workweek, as the law requires.

The FLSA, which the Wage and Hour Division enforces, requires that covered, nonexempt workers be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus one and one-half times their regular wages for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records.

For more information about federal wage laws administered by the Wage and Hour Division, call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd.

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U.S. Department of Labor releases are accessible on the Internet at www.dol.gov. The information in this news release will be made available in alternate format (large print, Braille, audio tape or disc) from the COAST office upon request. Please specify which news release when placing your request at (202) 693-7828 or TTY (202) 693-7755. The Labor Department is committed to providing America’s employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit www.dol.gov/compliance.