Department of Labor's Wage and Hour Division Has Recovered About $2.1 Million in Back Wages in Its Initiative with Residential Care Industry in North Carolina

Tuesday, January 29, 2013

An ongoing enforcement initiative conducted by the U.S. Department of Labor's Wage and Hour Division that focuses on the residential care industry in North Carolina has found widespread violations of the Fair Labor Standards Act's minimum wage, overtime and record-keeping provisions, particularly among group home facilities in the counties of Buncombe, Cumberland, Forsyth, Guilford, Mecklenburg and Wake.

The residential care industry includes group homes, board and care facilities, and other businesses providing residential care for the sick, the aged and individuals with limited self-care abilities. Facilities that have at least two employees are subject to the FLSA.

Since 2009, the division's North Carolina District Office conducted 200 investigations of residential care facilities within its jurisdiction, resulting in approximately $2.1 million in back wages for 1,800 employees who were denied fair compensation for all hours worked. The division also conducted 16 outreach sessions under this initiative in 2012, providing FLSA education and compliance assistance to hundreds of employers, employees and stakeholders throughout North Carolina.

Common violations found include failing to pay for work performed outside an employee's scheduled shift or time spent attending staff meetings and trainings; deducting eight-hour sleep periods from shifts of fewer than 24 hours; paying employees a flat salary without regard to overtime; and making illegal deductions for uniforms and other items that cause workers' wages to fall below the federal hourly minimum wage of $7.25.

Under the initiative, investigators will visit residential care facilities, such as adult care homes, assisted living and group homes, throughout North Carolina, to assess compliance among facility owners, independent and multi-unit operators, third-party management companies and other businesses associated with these establishments. Investigators will conduct thorough reviews of employment practices and payroll records, as well as employee interviews, to ensure compliance with all applicable labor standards. When violations are found, the division will pursue corrective action, including litigation, civil money penalties and liquidated damages, to recover workers' wages and ensure accountability under the law.

The division is conducting outreach to inform workers of their rights under federal labor laws, and is contacting community organizations, faith-based groups, local and state agencies, and other stakeholders to engage their participation in promoting compliance. The division is also providing FLSA compliance assistance and education to employers and industry associations.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 per hour as well as time and one-half their regular rates of pay for hours worked over 40 per week. In general, hours worked includes all time an employee must be on duty, or on the employer's premises or at any other prescribed place of work, from the beginning of the first principal work activity to the end of the last principal activity of the workday. Additionally, the law requires that accurate records of employees' wages, hours and other conditions of employment be maintained.

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