The Labor Commissioner targets industries where “wage theft” — any failure to legally and timely pay required wages, including paid sick leave and premium pay for missed breaks — is prevalent.

One such industry is board and care  i.e., residential facilities housing elderly or disabled people in need of living assistance.  There are 8,100 such RCFEs in California.

In 2018, we wrote about the Labor Commissioner citing Adat Shalom Board and Care in Los Angeles County, which ran six such facilities, more than $7 million for unpaid minimum wage, overtime, penalties for not providing required breaks, liquidated (double) damages, and civil penalties involving 148 workers between 2014 and 2017.  See Busted: Adult Care Facilities Must Pay Minimum Wage and Overtime or Face Expensive Consequences (February 2, 2018).  The Labor Commissioner found employees worked for 24 hours/day, while being paid for six hours, thereby making less than $3.00/hour.

Adat Shalom appealed that ruling with a hearing officer upholding the citations in 2021, increasing the citation to $8.5 million.  The Commissioner then went to court to stop the transfer of its assets to be used for collecting the judgment. The case recently settled for $5.5 million, of which Adat Shalom has thus far paid $2 million.  Labor Commissioner Lilia Gracia-Brower stated:

“For years, the employer paid these caregivers less than three dollars an hour and attempted to avoid liability by hiding assets. Our team took the employer to court to stop the illegal transfer of assets.  My office is committed to collecting owed wages from employers engaged in wage theft and stopping these illegal practices. This settlement also secures an agreement by the employer to no longer operate a residential care business in California.”

RCFE owners sometimes think that they do not have to pay for caregiver sleeping time or other times when they do not need to be actively working.  But if RCFE workers must remain available on the premises and respond to residents’ needs, they must be paid, including overtime for all hours over eight in a day or 40 in a week.

Take-Aways:

Board and care operators should consult with employment legal counsel to ensure they are paying all employees in accordance with the law.  Best practice ensures income will support operations that include correct pay practices.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• Employers Facing Prison Time: Prosecutors Targeting Garment Industry for Wage Theft (December 15, 2023)
• Dept. of Labor Half-Million Assessment Against Four California Care Homes (March 3, 2023)
• Residential Care Facility Not Feeling the Love (July 12, 2019)

Helena Kobrin
January 5, 2024