A $9.3 million judgment against a nurse staffing firm shows the ongoing challenges both workers and nursing homes face in finding reliable temporary staffing agencies.
The US Department of Labor announced Tuesday it had obtained a consent judgment to recover more than $4.6 million in unpaid overtime, an equal amount in damages and a civil monetary penalty of $700,000 from U.S. Medical Staffing.
The Pennsylvania-based nurse staffing firm was accused of failing to pay overtime to nearly 1,800 workers it placed in residential care facilities, group homes for residents with disabilities and home care roles in a five-year period starting in late 2017. Affected positions included caregivers and licensed practical nurses — the very same workers nursing home leaders have complained about losing to aggressive agencies since the pandemic started.
Those critics have said some unscrupulous firms have misled the workers they recruit by not withholding taxes or failing to deliver the number of hours promised. This case boldly outlines additional risks nurses face in leaving full-time employment for agency roles.
The judgment handed down Monday in the US District Court for the Eastern District of Pennsylvania followed an investigation by the department’s Wage and Hour Division that found the staffing firm “willfully” denied employees overtime pay. It did so, the department said in a press release, by paying straight time rather than time-and-a-half for hours worked over 40 weekly.
Department investigators also determined that, in some cases, US Medical Staffing falsely claimed to be a registry through which the company’s clients — healthcare settings themselves — solely employed the workers. US Medical Staffing also sometimes misclassified employees as independent contractors, the department said.
“This consent judgment makes clear to all healthcare industry employers that just like US Medical Staffing, they will be held accountable when they fail to pay employees their legally earned wages,” said Solicitor of Labor Seema Nanda.
‘Easy to exploit’ workers
Rebecca Givan, associate professor in the School of Management and Labor Relations at Rutgers University, said some agencies are “very skilled” at keeping workers in the dark as to their rights. In this case, some nurses might not have known they were due additional pay.
“As long as the worker doesn’t complain, there will be no investigation,” she said, noting that a number of private equity investors have rushed into the sector to exploit such loopholes. “I think in this sector, there are very low paid workers, there is a huge amount of federal money available, and the workers are sort of vulnerable, often immigrants, women and not necessarily very highly educated. So it is easy to exploit them and make money off of them.”
Facilities or patients billed for services could also have been in the dark about whether workers received additional pay they had earned by working more than 40 hours; it was unclear from documents available Tuesday whether facilities where the nurses worked paid additional wages that were not passed on.
There remain few regular, proactive oversight or investigative mechanisms when it comes to staffing agencies, Givan noted. Nursing homes have been among many healthcare providers begging the federal government to do more.
Nursing homes across the country are working to reduce their dependence on agency to drive down costs, improve continuity and boost care quality. At the same time, though, Givan said the current environment encourages healthcare providers to not ask questions about how the employees being sent to them are paid.
“They might be jointly liable if they know too much,” she said.
Increased involvement by cities and states could help keep agencies in check, but employer, subcontractor and agency layers make it hard to disentangle the companies from one another and determine who bears responsibility for illegal labor practices, Givan said.
Warnings about agencies that have used illegal practices also add effective operational pressure.“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,” noted Wage and Hour Principal Deputy Administrator Jessica Looman.
