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The Department of Labor is cracking down on the misclassification of 1099 workers harder than ever before. The risk that comes with staffing agencies wrongly classifying workers puts facilities at greater risk for legal liability and suit. At ShiftMed, we alleviate that risk by hiring every healthcare professional as a W-2 employee. Here, we carry the weight of these risks to ensure your facility's path to delivering quality healthcare is seamless and cost-effective.

Read this alert regarding recent litigation:

Healthcare Facilities Sued for Overtime of 1099 Agency Workers  

Healthcare facilities who utilize staffing agencies that classify their workers as independent contractors are being sued by the U.S. Department of Labor and plaintiff attorneys for unpaid overtime that these staffing agencies do not pay. The facilities, as the host employer who supervises the workers and whose rules, policies and procedures the workers must follow, are easily alleged to be liable as a joint employer.

Just recently, the DOL sued Comprehensive Healthcare Management Services, LLC (CHMS) alleging $19 million owed as a result of unpaid overtime. Clipboard Health and other agencies provided a large amount of CHMS’ workers. As Clipboard classifies all of its workers placed in facilities as independent contractors, the workers did not receive overtime despite many working over 70 hours per week. DOL has not yet sued Clipboard, but seeks to hold CHMS liable for all unpaid overtime hours these workers worked at CHMS’ multiple facilities.  

The DOL has long held the view that healthcare facilities are joint employers of staffing agency nurses. In 2013, when now Senior Counselor to the Secretary of Labor, Patricia Smith, who was the Solicitor of Labor at that time, the DOL sought and obtained a decision that noted  

If the right to supervise and control the manner and means of accomplishing the work remains in the [staffing agency’s] at the facility where the work is performed, then the client [facility] would likely become a joint employer together with [the staffing agency], and the nurses would still be employees under the FLSA, not independent contractors.  

Solis v. A+ Nursetemps, 2013 U.S. Dist. LEXIS 49595 (M.D. Fla.) citing Antenor v. D & S Farms, 88 F.3d 925 (11th Cir. 1996). 

DOL and private plaintiffs have continued to pursue joint employment against healthcare facilities. However, for facilities using agency nurses who work but are not paid overtime, the lawsuits are increasing. Just a few months ago, DOL announced a renewed focus on ensuring healthcare workers receive proper pay including overtime. DOL identified misclassification of healthcare workers as an increasingly common violation that DOL’s initiative will target. DOL’s initiative includes reaching out to healthcare workers to educate them on their rights to overtime and how to file a complaint with the DOL. Facilities and agencies should expect DOL will exceed the 1,600 heathcare investigations completed in 2022 with a focus on nurses misclassified as independent contractors.  

In January 2023 alone, DOL announced 9 settlements against healthcare facilities and/or medical staffing agencies for overtime violations and 5 of those involved nurses misclassified as independent contractors. This represents only a portion of the settlement DOL obtained last month as not all result in press releases. Lawsuits and arbitrations continue to be filed across the country against companies like Clipboard, ShiftKey, Kare, CareRev and the facilities who utilize nurses from these 1099 agencies. 


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ShiftMed's W-2 Workforce Model Removes Risk 

W-2 vs 1099 Workers

Learn more about the impact a W-2 workforce can make on your healthcare facility. 

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