Recent enforcement highlights DOL’s focus on preventing worker misclassification in healthcare staffing
At People2.0, keeping our partners informed about significant regulatory enforcement actions is a top priority. The U.S. Department of Labor (DOL) has recently obtained a consent judgment involving worker misclassification in the healthcare staffing industry that has important implications for staffing firms.
Understanding the Legislation
Overview
The DOL has secured a $2.4 million consent judgment against two healthcare staffing companies for overtime wage violations and worker misclassification, affecting 341 employees.
Objectives
The DOL’s enforcement action aims to:
- Combat worker misclassification in the healthcare staffing industry
- Ensure workers receive proper overtime compensation
- Enforce compliance with Fair Labor Standards Act requirements
- Protect workers’ rights to full wages and benefits
- Maintain fair competition among staffing agencies
As Wage and Hour Administrator Jessica Looman stated in the release, “Preventing and combating misclassification is a priority for the Wage and Hour Division as it deprives workers of their rights to full wages, health and safety protections, unemployment insurance, workers’ compensation and tax protections.”
Key Provisions
- Worker Classification: The case centered on misclassification of housekeepers, laundry, and dietary workers as independent contractors
- Geographic Scope: Services were provided at healthcare facilities across Maine, Massachusetts, New Hampshire, and Vermont
- Joint Employer Liability: Both the staffing agency and the healthcare services company were named in the judgment
Common Misconceptions
Many staffing firms incorrectly assume that service workers can be classified as independent contractors simply because they work on a temporary or contract basis. This case reinforces that worker classification depends on multiple factors beyond work duration.
What It Means for You
Impact Analysis
This enforcement action signals the DOL’s continued focus on preventing worker misclassification, particularly in the healthcare staffing sector. The case highlights that:
- Both staffing firms and their clients can face joint liability
- Misclassification can result in significant financial penalties
- The DOL is actively investigating healthcare industry compliance
Requirements
Staffing firms must:
- Properly classify workers based on DOL guidelines
- Pay appropriate overtime rates (over 40 hours per week under Federal law, some states, like California have additional rules)
- Maintain accurate employment records
- Ensure compliance across all service locations
Opportunities
This enforcement action presents an opportunity to:
- Review current classification practices
- Strengthen compliance protocols
- Implement robust record-keeping systems
Next Steps and Action Plan
Immediate Actions
- Review current worker classifications
- Audit overtime payment practices
- Verify record-keeping procedures
Long-Term Strategies
- Implement systematic compliance reviews
- Develop clear classification guidelines
- Establish documentation protocols
Personalized Assistance
Contact your People2.0 representative to discuss how we can help ensure your business remains compliant with DOL requirements.
Navigating Compliance Together
Our commitment to your success includes helping you navigate complex workforce compliance requirements. The recent DOL enforcement action underscores the importance of proper worker classification and wage compliance in the healthcare staffing industry. By partnering with People2.0, you can focus on growing your business while we help ensure your operations remain compliant with evolving regulatory requirements.
Source: “Department of Labor obtains consent judgment ordering 2 healthcare staffing companies to pay a total of more than $2.4M in back wages, liquidated damages to 341 employees,” U.S. Department of Labor, December 3, 2024.
