The U.S. Department of Labor has secured a consent judgment and order in federal court, recovering over $2.4 million in back wages and liquidated damages for 341 employees from healthcare staffing agencies in Massachusetts and Pennsylvania. These agencies had denied overtime wages to employees, including those misclassified as independent contractors.
The judgment was entered on November 25, 2024, by the U.S. District Court for the District of Massachusetts. It mandates Gate Solution Systems Inc., based in Malden, Massachusetts, and Healthcare Services Group Inc., located in Bensalem, Pennsylvania, to pay more than $2.4 million due to these violations.
Jessica Looman, Wage and Hour Administrator, emphasized the importance of addressing employee misclassification: “Misclassification of employees as independent contractors remains a serious concern for the Department of Labor,” she said. “Preventing and combating misclassification is a priority for the Wage and Hour Division as it deprives workers of their rights to full wages, health and safety protections, unemployment insurance, workers’ compensation and tax protections.”
The Wage and Hour Division found that Gate Solution Systems Inc. wrongly classified housekeepers, laundry staff, and dietary workers as independent contractors at healthcare facilities across Maine, Massachusetts, New Hampshire, and Vermont. These employees were not compensated with the required overtime rate for work exceeding 40 hours per week.
Besides paying back wages and damages to affected employees, the judgment also prohibits Gate Solution Systems and its officials from future violations of the Fair Labor Standards Act (FLSA), such as failing to maintain employment records.
Filed by the department’s regional Office of the Solicitor in Boston, the complaint named Gate Solution Systems along with certain officers and managers as well as joint employer Healthcare Services Group. It alleged that Gate Solution Systems hired these employees under Healthcare Services Group's supervision to provide cleaning, laundry, and dietary services at various healthcare facilities.
Seema Nanda, Solicitor of Labor stated: “This case’s outcome should remind employers that the U.S. Department of Labor will take appropriate action, including legal action, to protect workers whose employers deny them proper pay under the Fair Labor Standards Act.” She added that “the Department of Labor will always strive to protect the rights of workers.”
In fiscal year 2024 alone, the Wage and Hour Division completed 2,376 investigations within healthcare industries nationwide. These efforts resulted in over $37 million being recovered in back wages for nearly 30 thousand workers.
For further information about potential owed back wages or other inquiries related to labor rights—confidential assistance is available through their toll-free helpline at 866-4US-WAGE (487-9243), offering support in over 200 languages.
