A New Orleans home care agency will be required to pay a total of $630,000 to 80 employees after misclassifying them as independent contractors rather than employees.
Last week, the U.S. Department of Labor (DOL) received a consent judgment against Parishes Supportive Living, a home health provider that offers meal preparation, cleaning, personal hygiene, transportation, medication management and care services to elderly adults and people with disabilities, according to a release. In violation of the Fair Labor Standards Act, misclassified workers at the agency were not afforded benefits and protections that would be legally granted to employees, including overtime pay.
“Companies will be held accountable for denying workers their earned wages by misclassifying them as independent contractors,” said Troy Mouton, wage and hour division district director in New Orleans. “Care industry workers provide vital services, and they deserve every cent that the law requires.”
Parishes Supportive Living will be audited by a third party to review its payroll practices and FLSA compliance across a three-year time frame.
The DOL has made strides in recent years to prevent worker misclassification. In 2022, it proposed a rule that would make it easier to identify healthcare workers who have been misclassified as independent contractors. The rule would create measurements to determine whether a worker qualifies as an employee or independent contractor. Misclassification is potentially damaging to a person’s financial security, according to the proposed rule, and disproportionately affects Black, indigenous, and people of color.
The Wage and Hour Division reports a high incidence of misclassification in the home care industry, among other fields, according to the rule. In response, 17 healthcare organizations sent a letter to the DOL in January 2023, noting that the use of independent contractors grants agencies “flexibility” to maintain adequate staffing, particularly amid a workforce shortage that threatens home and other healthcare providers’ caregiving abilities.
