Federal court awards $35.8M in back wages, damages to western Pennsylvania healthcare workers

A Pennsylvania federal court has awarded $35.8 million in overtime back wages and liquidated damages to 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.

The Department of Labor said it’s one of the nation’s largest wage recovery judgments and the money will go to 6,000 people.

The 13-day bench trial, which wrapped on July 22, is the latest effort to recoup wages and damages from 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 Department of Labor said.

Operated in Allegheny, Westmoreland, Beaver, Lawrence, Mercer and Butler counties, the facilities included Cheswick Rehabilitation and Wellness in Indiana Township, The Grove at Irwin, The Grove at Latrobe, The Grove at Harmony, Monroeville Rehabilitation & Wellness, Mt. Lebanon Rehabilitation & Wellness and Brighton Rehabilitation and Wellness in Beaver County.

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.

“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 Division 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.”

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.

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.”

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