The U.S. Department of Labor has obtained a consent judgment and order in federal court that recovers a total of more than $2.4 million in back wages and liquidated damages from Massachusetts and Pennsylvania healthcare staffing agencies that denied 341 employees overtime wages, including employees misclassified as independent contractors.
Entered in the U.S. District Court for the District of Massachusetts on Nov. 25, 2024, the consent judgment and order requires Gate Solution Systems Inc. of Malden, Massachusetts, and Healthcare Services Group Inc. of Bensalem, Pennsylvania, to pay a total of over $2.4 million as a result of the violations.
“Misclassification of employees as independent contractors remains a serious concern for the Department of Labor,” said Wage and Hour Administrator Jessica Looman. “Preventing and combating misclassification is a priority for the Wage and Hour Division as it deprives workers of their rights to full wages, health and safety protections, unemployment insurance, workers’ compensation and tax protections.”
The department’s Wage and Hour Division found that Gate Solution Systems Inc. misclassified housekeepers, laundry and dietary workers as independent contractors. The employees in this case provided services at healthcare facilities in Maine, Massachusetts, New Hampshire and Vermont. Employees were not paid the required overtime rate when they worked more than 40 hours in a workweek.
In addition to paying back wages and liquidated damages to the affected employees, the consent judgment enjoins Gate Solution Systems and its officers and managers from future Fair Labor Standards Act violations, including failing to maintain employment records.
Filed by the department’s regional Office of the Solicitor in Boston, the complaint names Gate Solution Systems, certain of its officers and managers, and joint employer Healthcare Services Group, and alleges that Gate Solution Systems hired the employees to provide cleaning, laundry and dietary assistance services, under the supervision of Healthcare Services Group, at various health care facilities.
“This case’s outcome should remind employers that the U.S. Department of Labor will take appropriate action, including legal action, to protect workers whose employers deny them proper pay under the Fair Labor Standards Act,” said Solicitor of Labor Seema Nanda. “The Department of Labor will always strive to protect the rights of workers.”
The division’s Northern New England District Office conducted the investigation. The department’s Regional Office of the Solicitor in Boston filed the consent judgment.
In fiscal year 2024, the Wage and Hour Division concluded 2,376 investigations in healthcare industries. These investigations recovered more than $37 million in back wages for nearly 30,000 workers.