Overtime Miscalculation Costs Hawaii Rehab Clinic $171K in Back Wages, Plus Penalty

A physical therapy and rehabilitation clinic in Hawaii recently learned an expensive lesson about overtime compliance after a federal investigation found it shortchanged 32 employees.

The U.S. Department of Labor’s (DOL) Wage and Hour Division investigated First Physical & Functional Rehab and found violations of the Fair Labor Standards Act (FLSA).

According to the investigation, the clinic failed to combine hours worked across its three locations in Wahiawa, Waianae and Waipahu, which meant employees didn’t receive overtime pay they were owed. Under the FLSA, employers must pay non-exempt employees time-and-a-half for all hours worked over 40 in a workweek.

The agency determined the violations were willful and assessed civil money penalties on top of the back wages owed.

As a result of the investigation, the division recovered:

• $171,897 in back wages for the affected employees, and
• $18,810 in civil money penalties.

“Employers must abide by federal laws and ensure that workers are fully compensated for all hours worked,” said Wage and Hour Division Acting District Director Patrick Candoleta in Honolulu. “We will continue to hold employers accountable to help ensure that compliance is a priority in every workplace. We will also offer compliance assistance to help employers who seek it avoid violations of overtime requirements and other wage and hour rules.”

Overtime Rules When Employees Work Across Multiple Locations

Under the FLSA, hours worked across multiple locations for the same employer generally must be combined when calculating overtime. Employers cannot avoid overtime by treating each site separately if the work is for the same employer; if multiple entities are joint employers, hours must also be aggregated.

The DOL offers compliance assistance resources, including industry-specific toolkits, through its Wage and Hour Division. Employers can also self-report potential FLSA violations through the agency’s PAID program to resolve issues before they become federal investigations.