A nearly $36 million judgment has been imposed against the owners of 15 bankrupt nursing homes for alleged payroll violations, but a bankruptcy sale could make it more difficult to enforce.
Comprehensive Healthcare Management Services, its 15 nursing homes and part-owner Samuel Halper illegally denied $17.9 million to nearly 6,000 affected employees by failing to keep accurate payroll records, holding back overtime pay and failing to reimburse them for missed meal breaks, ruled Judge William Stickman of the US District Court for the Western District of Pennsylvania. The US Department of Labor brought the civil action against the defendants for payroll violations under the Fair Labor Standards Act (FLSA).
“The evidence credibly establishes not only that Halper and other defendants violated the FLSA, but that they did so willfully — if not maliciously,” Stickman wrote.
In addition to the $17.9 million awarded to the employees for back wages, the judge’s ruling included an equal amount in liquidated damages against the defendants.
Despite the outcome, questions remain as to whether affected employees will be able to collect the proceeds of the judgment. Nine of the 15 Comprehensive homes were set to be sold in US Bankruptcy Court in Pittsburgh, and with the judge’s approval, the new owners could obtain the facilities without having to pay any judgments related to the payroll case.
Details of a proposed $56 million sale of those facilities to Kadima Healthcare Group were not finalized as of press time, but Stickman denied an earlier injunction by the Labor Department to block the sale, saying the government could recover the judgment “through other means,” according to the Pittsburgh Post-Gazette.
From the September 2024 Issue of McKnight's Long-Term Care News
