Philadelphia home health-care company will pay $1.6M for skimping on overtime

A Philadelphia home health-care business will have to pay more than $1.64 million in back wages to 288 workers, after the U.S. Department of Labor found the company was not properly paying overtime rates.

Aging with Care Inc., based in Northeast Philadelphia, paid its home health aides between $9 and $13.50 per hour when the Labor Department was investigating, court documents said. The company should have been paying workers 1½ times their normal rates for any hours they worked beyond 40 in a week, but was not doing so, the department said.

Employees who didn’t get proper overtime pay were working an average of 56 hours per week, court documents said.

One way the company did this was by paying employees on separate checks for their work for separate clients, the department said, so the hours would not be combined to make more than 40 in a week. The company also failed to pay some employees for their travel time between patients’ homes, an average of two hours per workweek which would also have been overtime hours.

A consent judgment in federal court said the company must pay $823,265 in back wages to the workers, and an equal amount in liquidated damages, which are generally intended to discourage employers from underpaying workers.

The company also must pay a civil money penalty of more than $56,000 to the Department of Labor “for the willful nature” of its violations of the Fair Labor Standards Act.

The Labor Department in recent years has been investigating numerous violations by home health-care companies accused of failing to pay overtime.

A big part of the problem is that Medicaid in Pennsylvania, and in 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. The challenge has been exacerbated by the fact that demand for home health-care has grown, but the supply of workers hasn’t kept up, partially due to low wages.

“Home-care professionals who work for third party agencies are entitled to overtime under the Fair Labor Standards Act. This litigation and its outcome reflect our continued commitment to bringing this industry into compliance,” said Acting Regional Solicitor of Labor Samantha Thomas in Philadelphia.

A lawyer for Aging with Care did not respond to a request for comment on Thursday.