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Hospice staffing: Wage and hour legal challenges

On Behalf of | Aug 29, 2023 | Compliance, Healthcare Business

Hospice providers are critical in providing essential care and comfort to Texas patients in their last days. As healthcare worker shortages continue, hospices may inadvertently violate wage and hour laws by offering new forms of compensation to attract and retain more staff. The following covers some of the main issues that characterize wage and hour violations for hospice companies.

Common types of violations

Hospice employees have claimed their employers required them to work off the clock or did not allow them to take mandatory breaks. Other claims include incorrect calculations for overtime pay and not receiving pay for sick days. According to the U.S. Department of Labor, two hospice centers were required to pay over $54,000 in unpaid overtime and regular wages to 62 employees after classifying them as contractors and paying them less than the minimum hourly wage.

Staffing shortages and pay incentives

During the pandemic, hospices handled labor shortages by recruiting and retaining employees with signing bonuses, retention bonuses, higher wages and other compensation-based incentives. Offering these incentives has attracted heightened scrutiny from regulators due to the additional burdens of calculating overtime correctly and providing discretionary bonuses in addition to regular pay. Institutions that provide these incentives without carefully monitoring their compliance with applicable hospice law are putting themselves at risk for lawsuits.

Key components of wage and hour disputes

Legal claims due to wage and hour problems often result from poor documentation of wages, bonuses and other incentives. This lack of formalized documentation leads to misunderstandings and misrepresentations, whether or not unintentional. Hospice management must provide clear documentation regarding all terms of compensation and benefits from the start of an individual’s employment to prevent these types of disputes. The employees should have copies of all documentation regarding their wages and benefits to ensure transparency between them and their employer.

Consequences for wage and hour errors

If a hospice makes mistakes in its wage calculations, it may violate parts of the Fair Labor Standards Act. Successful legal claims against the company typically result in repercussions such as paying back wages and other financial penalties. Various states have their own regulations, and some may require the employer to pay up to three times the back pay owed to employees. The type of regulatory consequences for the company may change depending on whether the violations resulted from systemic issues or hospices exploited employees purposely.

To attract staff, the hospice industry must continue handling the complexities of offering competitive wages and benefits. Adherence to wage and hour regulations is crucial to navigating this challenging landscape.