Mother-daughter duo, Anna Zaydenberg, owner of Elder Resource Management, Inc. (ComForCare Home Care), and Marsha Simonds, owner of Staff Source (recruiting and staffing agency), were sued by the United States Department of Labor (DOL) for failing to provide overtime compensation to their employees.
Zaydenberg and Simonds led their workers’ overtime hours records to Staff Source to avoid paying overtime. Their employees were employed under ComForCare, the healthcare service provider, but received paychecks from both ComForCare and Staff Source. This is a form of payroll manipulation to show that there are less than 40 hours of work on each paycheck.
Zaydenberg and Simonds sought to get the case dismissed by arguing that the FLSA would not apply to their company providing personal services to customers in their own homes.
The court denied their argument to dismiss the case. The case was then settled in 2022, with the employees receiving a total of $ 2.4 million in overtime back wages as well as liquidated damages.
Key lessons from this case:
- This case shows that two employers can both be held accountable for overtime violations if they both share control over their employees.
- Employers who alter an employee’s paycheck to report an incorrect number of hours worked violate overtime laws.
- Employers who knowingly violate overtime laws can be held liable for additional costs that go beyond damages and overtime back wage compensations.
- Arguments based on misinterpretation of labor laws may not hold up in court, employers need to be aware of the scope of their responsibility and that of their entities.
If you want to know more about overtime regulations, read our guide on Pennsylvania Overtime Laws.
