A Maryland assisted living owner and operator has agreed to pay $950,000 in back wages and penalties for “willful” violations of federal minimum wage, overtime and recordkeeping rules, ending four years of litigation.
Philadelphia Regional Solicitor Oscar L. Hampton III said the case serves as an example to other assisted living employers that “shortchanging wages comes at a high cost.”
The Department of Labor’s Wage and Hour Division launched an investigation into parent company International Health Care Consultants, company owner and President Lois Peters, and IHCC Vice President Frank Dickerson, who managed the day-to-day operations of four Maryland assisted living communities under IHCC, in 2017.
The investigation found that IHCC did not pay caregivers and medication technicians a minimum wage and an overtime premium even though the company knew it was obligated to do so under the Fair Labor Standards Act.
According to the Labor Department, some workers were paid less than $5.42 per hour — below the $7.25 federal hourly minimum wage — whereas other employees received less than $6.67 per hour. Some employees working 24-hour overnight shifts also were only paid for 12 hours of work, violating overtime rules.
IHCC also did not provide adequate sleeping facilities for many employees, and the company required employees to respond to residents’ needs during their sleep and leisure time, according to the investigation. The company also reportedly violated FLSA recordkeeping requirements by not maintaining adequate and accurate records, according to the Wage and Hour Division.
Storia House in Fulton, Astoria II and Ashleigh’s Place in Columbia, and Golden Years Assisted Living in Mount Airy were named in the investigation.
“The significant amount of money due to just 27 employees indicates that these employees worked very long hours, often with little or no sleep at all during their shifts,” Wage and Hour Division District Director Nicholas Fiorello said in a statement. “Employers must not be allowed to profit by unfairly paying its workers, whose hard work and commitment make them successful.”
The Labor Department’s Office of the Solicitor in Philadelphia filed a lawsuit against the company and its management in 2018. The U.S. District Court for the District of Maryland entered the consent judgment April 21, resolving almost four years of litigation.
The court order requires IHCC to pay $466,642 — plus an equal amount in liquidated damages — to 27 current and former employees, as well as a $16,716 civil penalty for the “willful nature” of the overtime violations.
IHCC had filed a motion to dismiss the lawsuit in November 2018, but it was denied in September 2019. IHCC asked the court to reconsider the denial, but that request was denied in August 2020. IHCC filed a counterclaim in September 2020 alleging that the Labor Department violated the Administrative Procedure Act in bringing the lawsuit, and the company filed an amended counterclaim in October 2020. In April 2021, the court dismissed the amended counterclaim.
IHCC did not respond to requests for comment from McKnight’s Senior Living prior to the production deadline.
