Wage and Hour Violation Risks for Healthcare Organizations

Healthcare organizations and businesses can be held liable for violations of federal and state wage and hour laws committed by employees, outside agencies, independent outside agencies, or independent or contracted healthcare professionals. Violations could include failure to pay overtime, failure to provide meal and rest breaks, misclassification of employees as independent contractors rather than employees, or exempt vs. non-exempt employees. Healthcare organizations or businesses may increase risks from hiring agencies or contracted employees, including not knowing the employee's identity, agency/contracted payment arrangements, or labor classifications. The matter is between the employment agency and their employee/contractor. Depending on the situation, the issue is a gray area for the healthcare organization, and there could be a duty to perform due diligence on the matter. Further, even if the nurse has a corporation or partnership, the real test comes down to whether they are an employee of their firm, a 1099 independent contractor, or have control over their work product and work times. The point is that there is a higher risk for the organization, and violations can be costly. A competent employment attorney and contractual attorney are the best defense for the healthcare organization when preparing and reviewing contracts.