A Pennsylvania home healthcare company has agreed to pay $3 million to resolve claims that the company intentionally misclassified employees as independent contractors to avoid paying them overtime, according to court documents filed Monday by the U.S. Department of Labor.
The litigation against Amazing Care Home Healthcare Services stemmed from a 2021 DOL investigation that allegedly found the company did not pay a group of 284 employees an overtime premium for hours worked in excess of 40 hours per workweek.
DOL’s investigator estimated that the total amount of unpaid overtime totaled close to $6 million. The agency further alleged that the affected employees were improperly classified as independent contractors despite Amazing Care exercising control over their work, setting their wages, evaluating their performance and requiring them to report lateness or absence.
A federal judge allowed the case to proceed to a jury trial in February.
Per the terms of the agreement, Amazing Care would be enjoined from violating the relevant portions of the Fair Labor Standards Act or failing to follow the law’s associated recordskeeping requirements. The U.S. District Court for the Eastern District of Pennsylvania would need to enter the consent judgment proposed by the parties for the agreement to receive formal approval.
HR Dive asked legal counsel for Amazing Care if the company had any further comment on the proposed consent judgment. The company’s legal counsel confirmed the details but didn’t respond to a request for further comment by press time.
The case touched upon two wage-and-hour enforcement areas recently targeted by DOL for policy shifts: worker classification and overtime pay eligibility.
DOL’s independent contractor regulations are currently the subject of a forthcoming proposed rule. And while the department has not yet issued a new overtime final rule during the second Trump administration, it formally rescinded the Biden administration’s rule just days prior to publication of the proposed Amazing Care settlement agreement.