Federal court requires Pennsylvania home healthcare agency to pay $293K in back wages, damages to 75 workers denied overtime

SINKING SPRING, PA – The U.S. Department of Labor has obtained a consent judgment requiring a Sinking Spring home healthcare agency and its operator– which intentionally misclassified workers as independent contractors and misapplied an overtime rule to avoid paying full wages – to pay 75 caregiver employees a total of $293,990 in back wages and liquidated damages.

The action in the U.S. District Court for the Eastern District of Pennsylvania commenced with a June 2021 complaint filed by the department’s Office of the Solicitor, and followed an investigation by the department’s Wage and Hour Division.

The division found that Superior Health Inc. and owner Tina Bell did not pay the overtime premium for hours worked over 40 in a workweek by willfully misclassifying workers and identifying the workers as live-in caregivers to avoid paying overtime, which is a violation of the Fair Labor Standards Act. Investigators also determined that the employers failed to keep and preserve payroll records for employees for at least two years, including accurate records of employees’ total weekly overtime premium pay, as the law requires.

The investigation determined that Superior Health and Bell owed the affected employees – who worked between 40 and 90 hours per week – a total of $146,995 in back wages and an equal amount in liquidated damages. The division also assessed a $66,956 civil money penalty for the willful nature of the violations.

The department filed the complaint in June 2021 to recover the back wages and liquidated damages. It subsequently issued discovery requests to Superior Health Inc. and Bell. After neither fully responded, the court issued an order requiring their response. When the employers still failed to comply, the department moved for sanctions. To avoid further litigation, Superior Health and Bell agreed to enter a consent judgment.

In addition to recovered back wages and liquidated damages from the consent judgment, the employers also agreed to a permanent injunction against future FLSA violations.

“The true cost of misclassifying workers goes beyond the many hours of overtime pay stolen by Superior Health Inc. and Tina Bell. Misclassification denies employees access to critical benefits and protections they are entitled to, including unemployment insurance and Workers’ Compensation, and robs workers of the ability to provide financially and otherwise for themselves and their families,” said Wage and Hour Division District Director John DuMont in Pittsburgh.

“Our litigation efforts resulted in securing the consent judgment and recovering hard-earned wages for the home health workers. This case demonstrates the U.S. Department of Labor’s commitment to pursue litigation when employers fail to comply with FLSA requirements,” said Regional Solicitor Oscar L. Hampton III, in Philadelphia.

Headquartered in Sinking Spring, Superior Health Inc. operated locations there and in Erie.

The division’s Pittsburgh District Office conducted the investigation. Trial Attorney Alejandro A. Herrera, with the department’s Office of the Solicitor in Philadelphia, litigated the case.

In fiscal year 2021, the division recovered $13.8 million in back wages for more than 17,000 workers in the healthcare industry, known for both low wages and high rates of violations. As the U.S. population ages 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.  

“As employers struggle to find the people they need to operate their businesses, those who ignore workers’ rights to full wages and benefits are likely to struggle to retain and recruit workers,” added DuMont. “Employers who abide by the law will certainly have the competitive advantage over those who do not.”

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Workers can call the Wage and Hour Division confidentially with questions or concerns – regardless of their immigration status – and the department can speak with callers in more than 200 languages. Help ensure hours worked and pay are accurate by downloading the department’s Android Timesheet App for free.