A recent healthcare-related federal court settlement serves as a reminder that job titles do not determine overtime eligibility under the Fair Labor Standards Act. In Simmons v. ViaQuest Residential Services, LLC, No. 2:23-cv-201 (S.D. Ohio), a home health services company agreed to pay $975,000 to resolve claims that it misclassified its Program Managers as overtime-exempt. The case illustrates potential liability for classification decisions, and why healthcare employers should take a hard look at how they classify frontline supervisors.
Background
Kenneth Simmons filed suit in January 2023 on behalf of himself and other similarly situated Program Managers, alleging his employer misclassified Program Managers as exempt employees and, as a result, failed to pay them overtime for hours worked over 40 in a workweek. The central dispute was whether Program Managers’ actual, day-to-day duties were primarily managerial or primarily direct patient care. Simmons contended that Program Managers spent the bulk of their time providing hands-on patient care rather than any managerial duties, making them nonexempt regardless of their manager title. On the other hand, the employer argued that its Program Managers qualified under the FLSA’s executive and administrative exemptions, and maintained that Program Managers earned the required minimum salary, directed the work of at least two full-time employees, had hiring and firing authority, and exercised discretion and independent judgment on matters of significance.
After 106 current and former Program Managers opted-into the case and three years of litigation, the parties resolved their dispute with a $975,000 settlement.
What This Means in Practice
Healthcare employers should audit how they classify frontline supervisors. A few practical takeaways:
- Exemptions turn on actual duties, not job titles. The FLSA’s white-collar exemptions require that an employee’s ”primary duty” be executive or administrative in nature. Employers should ensure that supervisors classified as exempt are, in practice, primarily performing managerial functions rather than spending the bulk of their time on direct patient care.
- Auditing job descriptions is not enough. The relevant question is what employees actually do each day. Employers should gather information about how frontline supervisors spend their time, not just what their written job descriptions say they are supposed to do.
- Uniform classification decisions warrant uniform diligence. Where a single exemption classification is applied across a role, any error in that analysis can affect all employees holding the position. Employers should periodically reassess the exempt status of supervisory roles to confirm that each classification remains supportable.
- The healthcare sector is a focus. Cases like this one reflect broader enforcement and litigation attention on healthcare employers, where supervisory employees routinely perform both managerial and patient-facing tasks. Employers in this sector should be particularly attentive to classification decisions for such dual-role positions, as the FLSA's exemption framework may not neatly accommodate them.
- Proactive review reduces litigation risk. Periodic classification assessments conducted with the assistance of counsel can identify and correct misclassification issues before they give rise to costly collective or class action litigation.
Healthcare employers that rely on exempt classifications for frontline supervisory roles may benefit from periodically reviewing those classifications against the FLSA's primary duty test to confirm they remain defensible.