An overtime fix that seemed to work for everyone - except the feds
It's a troubling staffing dynamic that regularly plays out at many long-term care facilities:
Low-wage employees are practically begging for the opportunity to work extra hours. And the additional help is clearly needed. However, many facilities find themselves too cash-strapped to pay the time-and-a-half rate that overtime requires. As a result, services that might easily be delivered are instead left undone.
Yes, it's a bit of a Gordian knot. But for a while, it appeared an employer from another sector had figured out a work around. That is, until the Department of Labor nixed the solution in that gentle, subtle way federal agencies are known for. In other words, they publicly ridiculed the employer, called for an immediate halt to the practice, insisted that back pay be reimbursed — and threw in a hefty civil fine for good measure.
But I'm getting ahead of myself. This cautionary tale played out in Cleveland, where security guards employed by Citywide Protection Services repeatedly asked for extra hours, according to the firm's president, George Lewandowski. His response to the frequent requests was that he could not afford to pay them time-and-a-half. Sound vaguely familiar?
Lewandowski said the employees then offered a deal: They'd work the extra hours for straight-time pay. By all accounts, the unorthodox arrangement was effective: Workers were getting more money than they'd earn in 40 hours, needed services were being taken care of, and the company's labor costs were not being eviscerated by mounting overtime expenses.
By any measure, this was hardly an elegant solution, but it appeared to be working. That is, until the Department of Labor stepped in.
After investigating, the DOL demanded that Citywide pay $14,760 in overtime back wages to 30 security guards. The company was also ordered to pay $5,000 in civil money penalties for “willful and repeat violations” of the Fair Labor Standards Act. The germane part of the FLSA requires time-and-a-half for hours worked beyond 40 in a week.
For good measure, the DOL threw in a tsk-tsk press release, apparently just to ensure maximum humiliation.
So what's the takeaway here? If you are the government, it's simple: Rules are rules.
Fair enough. We all have to play by the rules. But what about when the rules do more damage than good? Like when residents don't get needed assistance because the person who wants to care for them can't? Do we hope that our all-knowing bureaucrats will have an epiphany and take corrective action? Or do we try to do the best we can under prevailing conditions?
Clearly, the correct answer is to put your complete trust in regulators. Unless you want to be the next Citywide.
John O'Connor is McKnight's Editorial Director.