In an article published in the June 2019 issue of Healthcare Risk Management, Jacqueline Hedblom discusses challenges for health care employers when facing allegations of Fair Labor and Standards Act (FLSA) violations, a law which regulates fair compensation for working hours and other limitations.
Recordkeeping and overtime pay can present unique challenges to health care employers, Jacqueline says, as “[it] has become a favorite weapon of plaintiffs’ attorneys because the possible recovery under the FLSA is so huge.”
Additionally, alleged FLSA violations can often cause collective actions against employers. “FLSA provides not only for individuals to recover wages for hours worked but not paid, but it also has a collective action mechanism that is similar to class action. You can get one disgruntled employee talking to his or her friends, and before you know it, you have 50 people banding together to press a collective action against the employer.” According to Jacqueline, these collective actions can expand quickly, generating significant potential liability and a serious threat to the employer’s reputation.
If there is any indication labor laws were violated, the employee filing is entitled to backpay, Jacqueline explains, along with the potential for liquidated damages equivalent to the amount of back pay – creating double recovery of back pay in potential liability.
“The law also allows for the recovery of attorneys’ fees, which often grossly exceed the back pay damage recovery. The FLSA is so heavily slanted in favor of the employee that it is difficult to even defend against what you think are false allegations because attorneys on both sides are racking up charges,” Jacqueline says. “If there is any recovery at all for the plaintiffs, even a dollar, the attorneys’ fees are recoverable and that is a tremendous risk for business.”
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Stephanie A. Hood