Adhikari contended that the company was financially unable to pay aides overtime without reducing their rates. The judge disagreed, emphasizing that while employers have the right to set a worker’s regular rate of pay, they cannot artificially reduce it to circumvent FLSA requirements. Judge Sargus noted that the FLSA’s intent is to ensure fair compensation for overtime work and prevent employers from adopting schemes to evade these obligations.
Americare’s pay practices involved a strategy where the hourly rate for employees decreased as the number of hours worked increased. For example, an employee working 77 hours in a two-week period was paid $12.50 per hour, but if the employee worked 96 hours, the rate dropped to $11.45. The court found this scheme violated core FLSA policies and had a detrimental impact on the workers’ pay.
The judge pointed out that Americare had other options, such as hiring more aides or not offering overtime, but chose to continue the unlawful practices. As a result, Americare is required to pay approximately $7.5 million in unpaid overtime wages and an equal amount in liquidated damages.
