"This & That" Tuesday: Whistelblowers, Inside Sales Exemption

 

April 21, 2015

 

 

Here is the latest issue of “This & That” Tuesday. I hope you find it to be informative and useful.

 

Announcements

You can always check out my website for upcoming speaking engagements that are guaranteed to be of value to business owners or for a list of topics that I can speak on at Chambers, Clubs, Business Associations, etc. More details about the events, topics and Human Resources 4U, in general, can be found on my website.

 

Upcoming Events (can be found under the “Speaking” section of my website)

April 21, 2015

2015 Labor Law Update & Paid Sick Leave

Institute of Management Accountants, LA chapter

Information can be found on my website.

 

April 28, 2015

2015 Labor Law Update & Paid Sick Leave

Pomona Rotary Club

Information can be found on my website.

 

June 2, 2015

Understanding and Building a Disciplinary Process

Compliance Key

Webinar

Information can be found on my website.

 

June 4, 2015

East SGV CPA Group

2015 Labor Law Update

Information can be found on my website.

 

June 9, 2015

South Pasadena Rotary Club

The New Paid Sick Leave Act

Information can be found on my website.

 

Hospital Settles Whistleblower Case for $7 Million

A recent multi-million dollar settlement of alleged fraudulent billing claims against a hospital highlights the rise of whistleblower activity in the healthcare industry. 

 

In 2011, All Children’s Health System in St. Petersburg, Florida was sued by an alleged whistleblower and former director of physician staffing employed by an affiliate of All Children's.  The employee had alleged that All Children’s excessive compensation of its employed physicians violated the anti-kickback Stark Act and, as a result, the Hospital’s submissions for Medicaid reimbursement were fraudulent in violation of the False Claims Act.

 

The employee’s amended complaint specifically sought to tie the Stark Act violations to the fraudulent government billings.  In the amended pleading, the alleged excessive payments to physicians were outlined in great detail, including claims that All Children’s hired a pediatric surgeon with a base salary “nearly $200,000 more than the median fair market value salary for a pediatric general surgeon of his experience” and that the Hospital used “side letters” guaranteeing physicians additional compensation or benefits that were not part of their main employment agreements.  According to the employee, “The plan” was pay whatever it takes to guarantee that the medical procedures, ancillary services and referrals were directed to All Children’s Hospital. Defendants hired physicians and acquired private medical practices at any cost, disregarding statutory and regulatory limitations.”  These “false claims” were allegedly submitted to the Florida Agency for Health Care Administration for reimbursement for services rendered as a result of improper referrals induced by Defendants’ wrongful conduct.

 

Shortly after the court let the complaint stand, All Children's agreed to pay $7 million to settle the lawsuit. The whistleblower will receive a 26.5% share of the total recovery, according to her attorneys, which amounts to $1.86 million.

 

LinkedIn Pay’s $6 Million in FLSA Inside Sales Settlement

LinkedIn will pay nearly $6 million in back pay and liquidated damages to 359 current and former employees following a Department of Labor investigation.

The employees are commissioned inside salespeople. Typically, inside salespeople are not exempt under the Fair Labor Standards Act, and must be paid overtime for all hours worked over 40. If an employee is paid a straight commission, you would, on a weekly basis, divide the commissions paid that week by the total numbers of hours worked to arrive at the hourly rate for that week. You would then multiply that hourly rate by 1.5 to obtain the overtime rate for that week, and pay the 0.5 premium rate on top of the commissions for any hours worked in excess of 40 for that week. LinkedIn says that the violation “was a function of not having the right tools in place for some employees and their managers to track hours properly.”

Do not assume that you need not pay overtime to employees who are paid other than hourly. The method of pay is not the only factor that determines whether an employee is exempt. Instead, you must undertake a fact-specific analysis for each employee’s job duties to determine if it falls under one of the FLSA’s narrow exceptions. Making assumptions without taking the time to do the analysis will result in costly wage-and-hour mistakes.

 

In California, the “Inside Sales” exemption is even more restrictive than the FLSA exemption. Make sure you understand CA law when classifying inside sales people as exempt. Note: the exemption only is possible for employers covered under wage orders 4 and 7.

 

Factoids

• The average tenure of a millennial is 2 years

·         The average tenure of a Gen X is 5 years

·         The average tenure of a boomer is 7 years

·         87% of employers say healthcare benefits will be a key part of their employee value proposition

• 99.5% of employers have no plans to exit active medical plans and direct employees to public healthcare exchanges

 

Quote of the Blog

“High expectations are the key to everything.”

~Sam Walton.~