Nurses Classified as Exempt From Overtime Reach Wage and Hour Settlement

A settlement has been proposed in a wage and hour class action lawsuit which alleged that nurses and clinicians were wrongfully classified as exempt from overtime.

Health Resource Solutions Inc. and a plaintiff group of registered nurses and clinicians have proposed a $738,000 settlement to close out an overtime class action lawsuit. The settlement will pay compensation to 79 workers who allege that they were wrongfully classified as exempt from overtime.

Both parties agreed on the settlement fund amount, stating that “class counsel estimate that the settlement amount distributed directly to the settlement claimants represents as much as nearly 90 percent of their maximum individual claims for overtime wages, exclusive of liquidated and other damages under the FLSA and IMWL”. The final approval hearing for the settlement is set for April 19.

Health Resource Solutions will keep $162,000 of the original $900,000 proposed settlement fund. The settlement was reduced after only 79 plaintiffs became claimants instead of the 175 expected collective members originally estimated. “All unclaimed settlement funds, which total $162,126.77, will remain with HRS,” lawyers stated in the motion.

The plaintiffs’ counsel has asked the judge to approve a $300,000 legal fee to be taken from the settlement fund. Although the fee was one third of the original settlement amount, it would amount to 41% of the final settlement fund if it is approved.

“Class counsel’s efforts have resolved this action before incurring the expense of extensive and lengthy class action litigation, trial and probable appeals, which has preserved judicial resources and benefited the class,” the plaintiffs’ attorneys said in their motion.

The class action was initially filed by lead plaintiff Monique B. in 2016. In her complaint, she alleged that Health Resource Solutions wrongfully classified their employees as exempt from overtime.

Under both the Fair Labor Standards Act (FLSA) and the Illinois Minimum Wage Law (IMWL), “for an employer to properly exempt an employee […] defendants must strictly and affirmatively establish both that the employee performs duties which meet one of the categories for exemption, and also that the employee is compensated on either a ‘salary’ basis or a ‘fee’ basis.”

However, Monique claimed that there was no payment structure for fees at all. Some visit fees were set in advance, but for other work, such as office time and staff meeting, they were paid on an hourly basis. Monique also claims that for some work, including “communicating with patients, physicians and case managers about scheduling, patient-care and logistical matters, coordinating patient care with other providers, traveling between patients’ homes [and] documenting information from patient visits,” they received no pay at all.

Monique claimed that, under the convoluted pay structure, she and 175 other registered nurses and clinicians were misclassified as exempt from overtime. The complaint included 10,000 employee weeks in which overtime was allegedly earned and not paid.

The Overtime Class Action Lawsuit is Case No. 1:16-cv-10667, in the United States District Court for the Northern District of Illinois.

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