Philadelphia home-care agency ordered to pay $7M in back wages for uncompensated travel time

A home-care agency based in Northeast Philadelphia will have to pay $7 million in back wages and additional damages for failing to pay overtime for hours that included work-related travel.

Prestige Home Care agency was ordered to pay more than $3.5 million in back wages to 1,230 current and former employees and an equal amount in liquidated damages, which are generally intended to discourage employers from underpaying workers.

“Unfortunately, our investigators found yet another Philadelphia-area home health agency willfully shortchanging employees and skirting the law,” said James Cain, a director in the U.S. Department of Labor’s Philadelphia wage and hour division.

Prestige had failed to pay some employees for travel time, which sometimes meant that their total pay dipped below minimum wage for actual hours on the job, the U.S. Department of Labor had alleged. Travel sometimes took an hour or more and resulted in workers actually logging more than 40 hours of work weekly, so they should have received overtime pay, the department said.

Judge Chad Kenney of the U.S. District Court for the Eastern District of Pennsylvania found that the company violated federal labor law by not paying employees 1½ times their usual wage for their overtime hours, he wrote in a May 12 order. They also violated the law by failing to keep records of employee wages and hours, the order said.

The case did not go to trial. Kenney ruled in the Department of Labor’s favor on summary judgment, which can be done when there are no factual questions in a case that require a trial.

The U.S. Department of Labor filed the case nearly two years ago.

“The court’s judgment affirms the Department of Labor’s position that home-care employers must pay employees for travel time, which is an essential part of their job duties,” Samantha Thomas, a deputy regional solicitor at the Department of Labor, said in a statement. “The outcome in this case serves as a stark reminder to other home-care employers that the consequences for shortchanging employees can be costly both to the company’s bottom line and to its industry reputation.”

The Labor Department has been investigating numerous violations by home health-care companies accused of failing to pay overtime.

A big part of the problem is that Medicaid in Pennsylvania, and in New Jersey, doesn’t pay home health-care agencies extra for the overtime a patient requires. It’s common for a home-care worker to surpass that 40-hour number regularly because many patients prefer to have just one health-care provider — often a family member who joined an agency to provide paid care to a relative. The challenge has been exacerbated by the fact that demand for home health-care has grown, but the supply of workers hasn’t kept up, partially due to low wages.

Lawyers for Prestige did not immediately respond to The Inquirer’s request for comment.