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UnitedHealthcare Pays Over $1M in Violations for Employee Misclassification

February 16, 2011

Our Chino Hills, California employment attorneys have been following the recent news that UnitedHeathcare has recently paid $934,000 in overtime back wages to 479 employees, along with over $100,000 in civil money penalties after the company was found to have engaged in employee misclassification by a U.S. Department of Labor investigation.

UnitedHealthcare is reportedly the biggest single health insurance carrier in this country, and according to the DOL investigation, the company was found to have erroneously classified employees in many different categories of jobs as administratively exempt from the Fair Labor Standards Act (FLSA), which denied them overtime payment when they worked beyond 40-hours in a workweek.

As our attorneys have reported in a recent Carson labor and employment lawyer blog, according to the Fair Standards Labor Act (FLSA) and California law, most non-exempt employees are entitled to receive overtime compensation, of one-and-a-half times their regular hourly pay rate when working beyond 40-hours in a work-week.

The FLSA provides "exempt" employees with exemptions from both minimum wage and overtime payment, who are administrative, executive, and professional employees, as well as outside sales and some computer employees. These are often called white collar exemptions, and according to federal FLSA laws, an employee can only qualify for these exemptions if exemption guidelines are met regarding their job duties and responsibilities.

The DOL investigation reportedly found that UnitedHealthcare incorrectly classified several different job categories as "administratively exempt" from federal labor laws, denying them overtime payment for every hour worked beyond 40 in a workweek.

In order for an administrative employee to qualify for an administrative exemption, they must receive a salary payment at a compensation rate that is not lower than $455 a week, and must perform office or non-manual work that is in direct relation to the business operation or management of the employer, or the employer's customers. The employee's primary job duty must be to exercise independent discretion or judgment in regard to specific and significant business matters.

UnitedHealthcare was also found to be in violation of the FLSA by failing to include certain employment payments in employee's regular rates, on which time and one-half should have been compensated. The company also reportedly violated recordkeeping regulations, as many hours worked by employees were not properly maintained for those who had been classified as exempt versus non-exempt in the workplace.

In cities throughout Orange County, California and Southern California, contact our labor and employment attorneys at Howard Law, PC today.

US Labor Department recovers more than $934,000 in overtime back wages for 479 employees of UnitedHealthcare in Hartford, Conn., U.S. Department of Labor Press Release, February 7, 2011

Related Web Resources:

U.S. Department of Labor: Wage and Hour Division (WHD), Fair Labor Standards Act (FLSA)

Related Blog Posts:

"White Collar" Exemptions under the FLSA, California Employment Lawyers Blog, November 12, 2010

"Exempt" vs. "Non-exempt" in the California Workplace, California Employment Lawyers Blog, April 15, 2010

California DLSE and Employee Misclassification, California Employment Lawyers Blog, April 19, 2010