In the case of Scalia v. Care At Home, LLC., the Secretary of Labor from the U.S. Department of Labor, Wage and Hour Division (the “Secretary”) conducted an investigation into potential overtime wage violations by Care at Home, a company providing personal care services. Daniel and Suzanne Karp were co-owners of Care at Home, but only Daniel Karp was responsible for setting pay rates, work schedules, and other employment-related matters. Despite that, being co-owners of a company still meant that both of them would be at a loss if the company was sued.
The investigation conducted by the Secretary was to prove that Care at Home was violating the Fair Labor Standards Act (FLSA). The investigation revealed that Care at Home had paid straight-time wages instead of an overtime rate to caregivers who worked over 40 hours per week. Care at Home had also deducted “food and lodging” expenses from the wages of 24-hour-live-in employees. This was prohibited under the FLSA.
Care at Home failed to produce certain records during the investigation, which prevented them from supporting their defense or arguing against the Secretary’s claims. The Secretary seeks to recover overtime back wages and liquidated damages for the affected employees.
Ultimately, the court favors the Secretary and affected employees. Care at Home was ordered to pay $19,301 in back wages and an equal amount in liquidated damages, totaling up to $38,603, to the affected employees. Any unclaimed amounts after three years will be deposited into the United States Treasury.
Key lessons from this case:
- Failure to maintain proper records can result in penalties, as the defendants violated the recordkeeping provisions of the FLSA.
- Employers are not allowed to make improper deductions from employees’ wages as it can violate the FLSA.
- If an employee does not claim their back wages within an allocated time, the money will not be returned to the employer but will be given to the United States Treasury.
If you want to know more about overtime regulations, read our guide on Connecticut Overtime Laws.
