Willow Grove-based health-care company that dodged overtime pay now owes workers $3.8M

Home health-care workers employed by a Willow Grove-based company will receive back pay after the U.S. Department of Labor found that they were illegally denied overtime wages.

TriMED HealthCare was ordered to pay $3.86 million in back pay and damages to 433 affected employees, as well as a $180,141 civil penalty.

It’s the latest in a string of investigations by the Department of Labor into home health-care companies that were underpaying their workers.

TriMED agreed to a settlement just before a jury trial was set to begin. The $3.86 million it is ordered to pay is the full amount the government planned to seek at trial, said Brian Krier, the Labor Department’s trial lawyer.

When hourly employees work more than 40 hours in a week, employers are required to pay them an overtime rate of at least 1½ times their usual wage, under the Fair Labor Standards Act. The regular pay rate at TriMED was $7.25 to $14 per hour, court documents said.

TriMED had avoided paying overtime by adjusting workers’ regular wage depending on how many hours they worked. If an employee worked more than 40 hours, the company would lower that person’s hourly rate just for that week, meaning that the time-and-a-half overtime wage would also decrease, according to the Labor Department. As a result, the company would ultimately pay that worker the same amount per hour as would be earned during a 40-hour workweek.

“It seems to be a fairly common practice in the home-care industry,” Krier said.

TriMED co-owner Beverly Jordan of Newtown admitted to this practice in a deposition, he added, and it was reflected in the company’s payroll. In very few instances, the adjustment made to avoid paying time-and-a-half caused hourly wages to dip below the federal minimum wage of $7.25, Krier said.

In some instances, TriMED simply paid employees the normal hourly rate for all hours worked, even if some should have been overtime, court records said. TriMED also failed to pay overtime to administrative employees, failed to pay care workers for travel time, and didn’t keep required records, the department said.

These problems are frequently found in wage-related investigations of home health-care businesses, Krier said. Another common violation by home health companies is misclassifying workers to avoid paying overtime, he said, but that wasn’t an issue in the TriMED case.

The Labor Department has been investigating numerous violations by home health-care companies accused of failing to pay overtime. From January 2021 to March 2022, the Philadelphia office concluded 38 investigations of home health-care firms in Southeastern Pennsylvania and found that 35 had violated federal labor laws, mostly by not paying minimum wage or overtime, officials said.

A big part of the problem is that Medicaid in Pennsylvania, and nearby New Jersey, doesn’t pay home health-care agencies extra for the overtime a patient requires. It’s common for a home-care worker to surpass that 40-hour number regularly because many patients prefer to have just one health-care provider — often a family member who joined an agency to provide paid care to a relative. It doesn’t help that as demand for home health care has grown, the supply of workers hasn’t kept up, partially due to low wages.

TriMED told its employees that it would not pay overtime or for travel time, according to court records, and acknowledged to workers that their rates would be lowered during weeks when they logged overtime.

The lawyer for TriMED did not immediately respond to a request for comment on the settlement.