Nursing Home Operators Must Pay $35.8 Million in Back Wages and Damages

In one of the nation’s largest wage recovery judgments, a Pennsylvania federal court has awarded $35.8 million in overtime back wages and liquidated damages to 6,000 current and former workers in nursing, rehabilitation and assisted living facilities.

The workers were employed by the operators of 15 residential facilities in western Pennsylvania that willfully denied them overtime pay, according to U.S. Department of Labor (DOL) investigators.

DOL said it filed suit in 2018 after the employers refused to resolve violations of the Fair Labor Standards Act (FSLA) administratively. The 13-day bench trial featured 50 testifying witnesses and more than 600 exhibits.

The July 22 judgment in the U.S. District Court for the Western District of Pennsylvania is the department’s latest step to recoup wages and damages from the 15 nursing facilities, their owner and CEO Samuel “Sam” Halper and CHMS Group, the payroll office that the facilities used to implement their illegal compensation practices.

Department investigators discovered that the employers violated the FSLA for years by willfully failing to pay employees for all hours worked, including work done during meal breaks; failing to incorporate all promised compensation, including non-discretionary bonuses and shift differentials, when calculating overtime pay; avoiding paying overtime by incorrectly treating employees as exempt from the act’s overtime requirements; and not keeping accurate records of hours employees worked and compensation due for those hours.

US District Judge William S. Stickman IV awarded $17.9 million in back wages and $17.9 million in damages. The judge noted that the Fair Labor Standards Act mandates that each covered employee receive a “fair day’s pay for a fair day’s work.” He found that the evidence at trial “credibly and conclusively established” that all defendants “created and oversaw a system whereby employees who had worked a fair day, and often more, did not receive their fair day’s pay.”

“Make no mistake, these were not occasional, innocent payroll errors,” the judge wrote. Instead, “employees were consistently, systematically, and willfully subjected to payroll practices that did not remotely comply” with the provisions of the FSLA.

DOL Wage and Hour Administrator Jessica Looman said investigations often reveal that workers who provide essential care services to those who need them the most are not receiving their full wages from employers.

“The U.S. District Court’s decisive and historic ruling that Sam Halper and his nursing facilities willfully violated labor laws affirmed the Department of Labor’s position that the employers committed wage theft intentionally,” said Solicitor of Labor Seema Nanda.

The complete list of the facility defendants:

Comprehensive Healthcare Management Services, LLC d/b/a Brighton Rehabilitation and Wellness Center; Maybrook-C Briarcliff Opco, LLC, d/b/a The Grove at Irwin or The Grove at North Huntingdon; Maybrook-C Evergreen Opco, LLC, d/b/a The Grove at Harmony; Maybrook-C Kade Opco, LLC, d/b/a The Grove at Washington; Maybrook-C Latrobe Opco, LLC, d/b/a The Grove at Latrobe; Maybrook-C Overlook Opco, LLC, d/b/a The Grove at New Wilmington; Maybrook-C Silver Oaks Opco, LLC, d/b/a The Grove at New Castle; Maybrook-C Whitecliff Opco, LLC, d/b/a The Grove at Greenville; Momoeville Operations LLC, d/b/a Momoeville Rehabilitation & Wellness Center; Cheswick Rehabilitation and Wellness Center, LLC; Mt. Lebanon Rehabilitation and Wellness Center, LLC; Murrysville Operation, d/b/a Murrysville Rehabilitation & Wellness Center; North Strabane Rehabilitation and Wellness Center, LLC; North Strabane Retirement Village, LLC; South Hills Operations LLC, d/b/a South Hills Rehabilitation and Wellness.