Healthcare Staffing Agencies Fined for Underpaying, Misclassifying Cleaning Staff

The U.S. Department of Labor (DOL) has obtained a judgment and order in federal court that recovers more than US$2.4 million in back wages and liquidated damages from Massachusetts and Pennsylvania healthcare staffing agencies that denied 341 employees overtime wages, including employees misclassified as independent contractors. 

Filed by the department’s regional Office of the Solicitor in Boston, the complaint names Malden, Massachusetts-based Gate Solution Systems, some of its officers, and managers, and joint employer Healthcare Services Group of Bensalem, Pennsylvania. It alleges that Gate Solution Systems hired the employees to provide cleaning, laundry, and dietary assistance services, under the supervision of Healthcare Services Group, at various healthcare facilities.

The department’s Wage and Hour Division found that Gate Solution Systems Inc. misclassified housekeepers, laundry, and dietary workers as independent contractors. The employees in this case provided services at healthcare facilities in Maine, Massachusetts, New Hampshire, and Vermont. Employees were not paid the required overtime rate when they worked more than 40 hours in a workweek.  

“Misclassification of employees as independent contractors remains a serious concern for the Department of Labor,” said Jessica Looman, Wage and Hour administrator. “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.”