The US Department of Labor (DOL) has recovered $171,897 in back wages from a physical therapy and rehabilitation clinic after an investigation found the employer denied 32 employees full overtime pay at three of its facilities, according to a press release issued on May 6, 2026.
Investigators with the department’s Wage and Hour Division determined that the company failed to combine hours worked across its three locations in Wahiawa, Waianae, and Waipahu, resulting in some employees not receiving proper overtime compensation. The Fair Labor Standards Act (FLSA) requires employers to pay workers one and one-half times their regular rate of pay for all hours worked over 40 in a workweek.
In addition to the back wages, the employer paid $18,810 in civil money penalties due to the willful nature of the violations.
“Employers must abide by federal laws and ensure that workers are fully compensated for all hours worked,” said Wage and Hour Division Acting District Director Patrick Candoleta in Honolulu. “We will continue to hold employers accountable to help ensure that compliance is a priority in every workplace. We will also offer compliance assistance to help employers who seek it avoid violations of overtime requirements and other wage and hour rules.”
Compliance Perspective
Issue
The FLSA establishes minimum wage, overtime pay, and recordkeeping requirements for covered employers. Unless exempt, employees must be paid at least one and one-half times their regular rate of pay for all hours worked over 40 in a workweek. When employees work at multiple locations or facilities operated by the same employer, all compensable hours worked during the workweek must generally be combined for purposes of calculating overtime obligations. Employers are also required to maintain accurate and complete records of hours worked and wages paid for each non-exempt employee. Failure to properly track and combine hours worked across locations may result in overtime violations, recordkeeping deficiencies, and financial liability.
Discussion Points
- Review and update policies and procedures related to timekeeping, overtime calculations, payroll practices, and recordkeeping to ensure alignment with federal and applicable state requirements. Policies should clearly address how hours worked across multiple facilities, departments, or job roles are tracked and combined for overtime purposes. Ensure responsibilities for supervisors, payroll personnel, and employees are clearly defined and that procedures are consistently implemented across all locations. Some organizations may also benefit from periodic reviews by an external consultant to evaluate payroll and timekeeping processes, identify compliance gaps, and provide recommendations aligned with regulatory expectations and operational practices.
- Provide training for supervisors, payroll personnel, human resources staff, and other individuals responsible for timekeeping and wage administration. Training should address accurate tracking of hours worked, overtime eligibility requirements, recordkeeping obligations, and procedures for employees who work across multiple locations or positions within the organization. Med-Net Academy offers the course Understanding the Fair Labor Standards Act, which provides an overview of FLSA requirements and their application to healthcare employers and employees. The course addresses exempt and nonexempt classifications, overtime eligibility, compensable hours worked, calculation of the regular rate of pay, and common compliance concerns involving meals, travel, on-call time, training, and recordkeeping. It also reviews common violations and compliance requirements related to overtime, youth employment, and anti-retaliation protections to help organizations identify risks and support effective workforce management.
- Conduct routine audits of payroll records, timekeeping systems, and overtime calculations to verify that all compensable hours are accurately captured and properly combined across facilities or departments when applicable. Audit activities may include reviewing employee schedules, payroll reports, and time records to identify discrepancies, missed overtime, or inconsistent practices between locations. Periodic assessments performed with the assistance of an external consultant can provide an objective review of compliance practices, help identify potential risks early, and support timely corrective action where needed. Contact Med-Net Healthcare Consulting or info@mednetconcepts.com for more information.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*