Labor Department wants Indy health care owner held in contempt on overtime issues
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The U.S. Department of Labor is asking a federal judge to hold the owner of eight Indianapolis-area health care services companies in contempt for allegedly ignoring a 2022 court judgment requiring him to pay overtime to his employees.
The Labor Department filed a complaint this week in U.S. District Court in Indianapolis against Tim Paul, saying an estimated 700 employees of his companies since April 2020 might have been shortchanged by his practices.
Investigators with the department’s Wage and Hour Division said they found that Paul manipulated regular pay rates of employees who worked more than 40 hours in a work week to pay them the equivalent of straight-time rates for all hours worked, according to a Labor Department’s press release.
Paul, reached at his company by phone on Thursday, said he had done nothing wrong. “We definitely plan on fighting this to the full extent because there’s nothing substantiated,” he told IBJ.
He referred questions to his attorney, Michael Terrell of Taft Stettinius & Hollister LLP in Indianapolis. Terrell did not immediately return voice messages left on his office and mobile phone by IBJ.
The plaintiff is Julie Su, acting secretary of the U.S. Department of Labor.
Named as defendants are Paul and his companies TPS Caregiving LLC (dba Comfort Keepers), Home Care, Heal at Home LLC, Healing Hands Home Health LLC, Healing Hands Personal Services Agency LLC, TPS Medical Holdings LLC, Healing Hands Outpatient Therapy and Rehabilitation Center LLC, Community Integration Support Services LLC, and Tranquility Nursing and Rehab LLC.
The complaint alleges Paul’s efforts to avoid paying required overtime wages began the day after the previous investigative period ended.
“The Department of Labor has asked the U.S. District Court to hold Tim Paul and his companies in contempt for violating the 2022 consent judgment he signed,” Christine Heri, regional solicitor of labor in Chicago, said in written remarks. “When employers violate the FLSA’s pay requirements after resolving a case through a consent judgment, the department will seek to hold them accountable in court.”
The Labor Department said it examined records at TPS Medical Holdings LLC of Indianapolis, which provides management and payroll services for the other companies and home health care agencies. Investigators also reviewed records at three now-closed home health agencies Paul operated. These are Healing Hands Outpatient Therapy and Rehabilitation Center LLC, which operated in Anderson from April 12, 2020, through Dec. 31, 2021; Community Integration Support Services LLC, which operated from April 12, 2020, through June 1, 2021; and Tranquility Nursing and Rehab LLC, which operated from April 12, 2020, through Oct. 15, 2021, in Indianapolis.
The complaint alleges violations by them and all of the other companies the division examined.
In addition to its request for a contempt finding, the department has asked the court to require Paul and his companies to hire, at their expense, a third-party accountant to calculate the exact back wages due to the extremely large volume of pay records involved.
Investigators specifically found the employers failed to pay overtime under numerous circumstances, and had employees sign “confusing pay agreements” showing they earned more working overtime when, in fact, they earned less than their rightful wages, the complaint said.
When Medicare or Medicaid approved more care hours per week for individual clients, the employers lowered the employee’s hourly rate of pay, again to reduce the employers’ overtime expense, the complaint said.
In 2021, the division investigated Comfort Keepers, Heal at Home and Tim Paul for violations from April 30, 2019, through April 11, 2020. The department’s Office of the Solicitor obtained a consent judgment in January 2022 that prohibited future violations.
“The Department of Labor will always fight to protect workers’ rights and hold employers accountable for violating federal law,” Aaron Loomis, wage and hour division district director in Indianapolis, said in written remarks. “We are determined to recover the wages rightfully earned by the workers employed by Tim Paul and his companies.”
Trial attorneys Haley Jenkins and Adam Lubow are litigating the case on behalf of the department’s Office of the Solicitor.