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Across the country, employees continue to return to offices. However, this post-pandemic transition has not been ubiquitous, as many employers adopt hybrid models or allow some or all of their employees to work from home permanently. In many cases, employees may work in a different state than that of the employer, and employers, including those in the managed care industry, are often faced with navigating the bevy of federal, state and local laws that may now apply to their multi-state workforce. Of particular importance are wage and hour laws, which may indicate how often an employee must be paid, how much overtime compensation a non-exempt employee must make and the number of meal and/or rest breaks an employee must receive during the workday. In today’s environment of fluid work arrangements, employers in the managed care industry must remain knowledgeable of the wage and hour laws that apply to their workforce and the risks of noncompliance.
Wage and hour laws across the country vary greatly from federal standards. For instance, states and even localities adopt greater minimum wages than the federal minimum wage and in many of these jurisdictions, the minimum wage increases at annual intervals. Another important distinction between state and federal law arises with overtime pay. For example, some states adopt a different overtime compensation structure, such that employees may qualify for overtime pay after working a certain number of hours in a day. While it is always important to understand the wage and hour laws that apply to an employer’s workforce, it is particularly important when an employer has a remote or hybrid workforce. With remote and hybrid employees, it can be more difficult to know when an employee starts and stops working or when (or if) they are taking their meal and rest breaks, for instance. This challenge reinforces the importance of notifying and training hybrid or remote employees on an employer’s timekeeping practices and policies and having measures in place to monitor compliance, for example.
Noncompliance with federal, state and local wage and hour laws can come at a significant legal, monetary and reputational cost. For instance, in 2017, Humana was sued by a collective action of more than 200 nurses who alleged that the health insurer misclassified them as exempt employees under federal law and failed to pay them overtime compensation. Following approximately three years of litigation, Humana reached an $11.2 million settlement with the collective to end the lawsuit. Humana denied any liability when it entered into the settlement. Moreover, in recent years, the U.S. Department of Labor has undergone a nationwide effort to improve compliance by care-focused industry employers, including residential care, nursing facilities and home health services, with federal wage and hour laws. In 2022, the Department of Labor announced its completion of more than 1,600 investigations, which identified violations in 80% of its reviews and led to recovery and assessments against employers in the tens of millions of dollars, including back pay, damages, and civil monetary penalties.
In maintaining compliance with current wage and hour laws that apply to their hybrid and remote workforces, employers should familiarize themselves with recently passed wage and hour laws in major states and localities. For example, new in Illinois last year is an expanded meal break law, which now provides an additional meal break to employees who have worked beyond a certain number of hours each day. The same law now requires employers to provide a day of rest to each employee within a certain number of consecutive work days.
As employers in the health care industry continue to navigate the unfamiliar terrain of a workplace comprised of in-person, hybrid and remote employees, employers must take extra steps to ensure compliance with all applicable federal, state and local wage and hour laws. Employers should be aware of where their hybrid and remote employees are working, ensure their employees have knowledge of applicable employer policies and practices pertaining to timekeeping and meal breaks, and engage in periodic reviews of the practices and physical locations of their employees.
- Remote/hybrid work is transforming federal and state wage and hour laws; employers must keep up with changes
- State laws can vary greatly and compliance complexity increases as more employees work remotely in different states
- Employers should be on the lookout for state legislation that requires immediate action or imposes significant costs