A Brooklyn, N.Y. healthcare staffing agency is facing legal action brought by the U.S. Department of Labor for forcing employees to stay with the company for three years or give back their wages.
The DOL's Office of the Solicitor filed suit in the U.S. District Court for the Eastern District of New York against Advanced Care Staffing LLC and CEO Sam Klein, the department announced March 20. The complaint alleges ACS and Klein required workers to sign employment contracts "that flagrantly disregarded federal law by requiring employees to complete at least three years of full-time employment to keep their earned wages," the DOL reports in the news release.
"The contracts would – and allegedly did – force employees who left before the contracts expired into private arbitrations, and require them to pay ACS’ future profits, plus attorneys’ fees and arbitration costs," the news release states. "These demands would lead – and allegedly led – to employees being paid less than the federal minimum wage." The alleged actions violate the Fair Labor Standards Act (FLSA), the news release states.
The suit, part of a continuing investigation by Wage and Hour Division, alleges also that ACS further violated the FLSA by pursuing arbitration against a registered nurse who resigned after repeatedly filing safety concerns, to pay ACS more than the nurse actually earned "to subsidize ACS' future profits;" and that the company's contract and arbitration requirements "have a chilling effect" on workers' pursuing their rights, protections from unsafe workplaces and to be paid all earned wages.
The complaint requests an injunction against ACS and Klein forbidding them from reducing employee wages below federal minimums, "whether by demanding employees enter into contracts requiring them to cover ACS’ future profits, attorneys’ fees or costs associated with arbitration, or by enforcing such contracts," and demands back wages and liquidated damages for affected employees, according to the news release.
The FLSA required most U.S. workers must be paid at least the legal minimum wage for all hours worked and be paid time-and-a-half of their regular rate for hours over 40 worked in a week, the release reports.
"Federal law forbids employers from clawing back wages earned by employees, for employers’ own benefit," Solicitor of Labor Seema Nanda said in the news release. “Employers cannot use workers as insurance policies to unconditionally guarantee future profit streams. Nor can employers use arbitration agreements to shield unlawful practices.
"The Department of Labor will do everything in its power to make sure employees are being paid their hard-earned wages, and to safeguard them from these types of exploitative practices.”
