US Department of Labor probe, litigation leads to one of nation’s largest FLSA judgments
PITTSBURGH – 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 employed by the operators of 15 residential skilled nursing, rehabilitation and assisted living facilities in western Pennsylvania that willfully denied them overtime pay.
After a 13-day bench trial, the July 22, 2024, judgment in the U.S. District Court for the Western District of Pennsylvania is the department’s latest step to recoup wages and damages, jointly and severally, from the 15 nursing facilities, their owner and CEO Samuel “Sam” Halper and CHMS Group, the payroll office that the defendants used to oversee and implement their illegal compensation practices. The action follows an investigation by the department’s Wage and Hour Division in Pittsburgh and litigation by its Office of the Solicitor in Philadelphia.
“Far too often, our investigations find that workers who provide essential care services to those who need them most are not receiving their hard-earned wages from employers,” said Wage and Hour Administrator Jessica Looman. “The Wage and Hour Division is committed to protecting workers’ rights to be paid fully and fairly and holding employers who violate these rights accountable.”
Specifically, department investigators discovered that the employers violated the Fair Labor Standards Act for years, across their enterprise, by doing the following:
- 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.
- Not keeping accurate records of hours employees worked and compensation due for those hours.
After the employers refused to resolve their violations administratively, the department filed suit in 2018 in federal court. The trial featured 50 testifying witnesses and more than 600 exhibits. Senior Trial Attorney Alejandro Herrera and trial attorneys Mohamed Seifeldein and Erik Unger conducted the trial on behalf of the department. A representative of the department’s Office of the Chief Information Officer testified to the significant effort to summarize the employers’ inaccurate employment records and determine the amount of back wages due. In addition to being jointly and severally liable for the back wages and damages, Halper, CHMS Group and the 15 facilities are all permanently forbidden from further FLSA violations.
“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 outcome of the department’s investigation and litigation also shows our unwavering commitment to enforcing the employee protections in the Fair Labor Standards Act and ensuring employers fulfill their obligation to comply with the law.”
The employers and their owners operate residential skilled nursing, rehabilitation and assisted living facilities throughout western Pennsylvania.
For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the division’s toll-free helpline at 866-4US-WAGE (487-9243). Workers and employers can contact the division confidentially, regardless of where they are from. The division can speak with callers in more than 200 languages.
Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division. Download the agency’s new Timesheet App for Android and iOS devices to ensure hours and pay are accurate.
