Have You Taken Your Hospital’s Pulse Lately? FLSA Collective Actions Are Healthcare’s Next “Big” Thing!

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While healthcare executives have been bracing themselves for the impact of 2010’s healthcare reform, another threat to the well-being of your healthcare system has gone largely ignored. Wage and hour actions targeting the health care industry have exploded recently, exposing hospitals to expensive and time consuming litigation. This trend is expected to continue into the immediate future. A recent $8.5 million settlement involving a Massachusetts hospital illustrates the vulnerability hospitals face. In that case, attorneys sued claiming that the hospital failed to appropriately pay hourly workers for time worked before and after their scheduled work shifts and during interrupted or missed meal breaks. Workers also claimed that they were not properly compensated for training time. The same law firm extracted a $9 million wage and hour settlement from a New York hospital.

The threat comes from not only the plaintiffs’ bar, but from the federal government as well. Secretary of Labor Hilda Solis has made it clear that the of the U.S. Department of Labor (DOL) is “back in the enforcement business.” As a result, wage and hour investigations are on the rise. This initiative by the DOL (creatively titled “We Can Help”) promises to catch many employers, especially healthcare employers, unaware. The healthcare industry is a particular target. The DOL has stated that one regional investigation of Fair Labor Standards Act (FLSA) compliance among healthcare employers found only a 36% compliance rate. With the cost of non-compliance stretching into the millions of dollars, healthcare employers should give immediate attention to engaging in a compliance self-assessment.

Compounding the problem are the recent aggressive marketing efforts by the plaintiffs’ bar. Websites such as hospitalovertime.com proclaim...

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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