It’s simple that the pandemic fractured the already tenuous relationship between well being methods and staffing businesses. Confronted with overwhelming affected person demand, well being methods more and more relied on conventional businesses and tech-enabled platforms to fill shift gaps. Sadly, the desperation for nursing employees opened the door for exploitation, with some businesses selecting to cost gouge and take large income.
The exploitation, nevertheless, will not be restricted to these businesses that used the constrained nursing provide to prioritize revenue over care. One other exploitative observe has emerged, particularly the misclassification of nursing employees as 1099 impartial contractors. The Division of Labor (DOL) has taken discover of this situation, and their curiosity carries vital authorized and monetary implications not just for businesses however the methods that have interaction them.
The truth is, the DOL lately filed a lawsuit in Pennsylvania towards a talented nursing facility, alleging that the power used a tech-enabled staffing platform supplier which categorized its employees as impartial contractors, and searching for $19 million in unpaid additional time.
You could be questioning why the DOL is suing the power possession group and never the staffing company. That’s as a result of within the eyes of entities such because the IRS and DOL, healthcare methods and amenities are on the very least simply as culpable because the company in the case of employee misclassification. Assuming that businesses tackle all the authorized and monetary danger that comes with misclassification will not be solely fallacious, but it surely may in reality fall squarely on the healthcare system.
Because the healthcare business continues to intersect with the gig economic system, we’re seeing the emergence of extra rules to handle the grey areas that exist. Whereas impartial contractor classification has been widespread within the gig economic system to offer organizations with a degree of flexibility, it doesn’t appropriately apply to healthcare employees, particularly nursing professionals.
The IRS and DOL decide worker classification by the office relationship, not the phrases of a contract between the office and staffing supplier. If the IRS and DOL conduct an audit of a healthcare facility and discover {that a} 1099 contractor was misclassified and ought to be a W-2 worker, the power could also be held legally accountable as an employer. Which means the power could be accountable for unpaid additional time pay, taxes, and different steep penalties.
Healthcare leaders want to know the implications of those rules throughout the context of their business. For instance, in long-term care, licensed nurse aides (CNAs) make up over half of the nursing workforce. CNAs require vital oversight, coaching, and management to make sure optimum affected person outcomes, which aligns with the traits of an worker. The DOL seems to agree with this angle.
The Labor Division has carried out over 1,200 employee misclassification investigations in long-term care since 2021, leading to tens of millions of {dollars} in again wages for impartial contractors and fines paid to the federal authorities. Moreover, particular person states like Illinois, California, Oregon, Louisiana, Pennsylvania, and Connecticut are actively making modifications to their healthcare labor classification rules.
Whereas it’s necessary to keep in mind that the current litigation is shining a light-weight on the dangers of employee misclassification, this situation will not be new. There are monetary benefits to classifying employees as impartial contractors, which is why some businesses select this strategy. Working as a 1099 enterprise permits enlargement into new markets with out the burden of onboarding and totally credentialing each nurse and aide. With out the prices of advantages and payroll taxes, a extra engaging sticker worth is obtainable to healthcare communities.
W-2 employed nurses and aides obtain the advantages, wage, and additional time protections mandated by the Honest Labor Requirements Act (FLSA). Extra importantly, worker designation permits staffing businesses to offer correct coaching, supervision, and administration to fulfill high quality requirements and appropriately deal with medical incidents.
That is the place the 1099 mannequin in healthcare falls flat. It creates an atmosphere the place nurses and aides are offering the vast majority of direct affected person care but lack the coaching, help, and oversight that they require. The 1099 mannequin will not be solely dangerous for well being methods, but it surely’s additionally harmful for sufferers.
The newest information exhibits that 60% of nurses are planning to alter their work standing within the coming yr. To beat this, we want staffing partnerships which are constructed on belief. This begins with stopping businesses from offloading vital danger onto the communities that depend on them, permitting them to prioritize income over the well-being of each sufferers and nurses.
With the enforcement of employee classification changing into stricter, healthcare leaders should fastidiously consider their staffing companions. Defending nursing professionals and conserving them on the bedside should be a shared accountability that’s upheld via state and federal rules and licensing necessities. By means of transparency and belief, we are able to prioritize the well-being of nurses and construct partnerships targeted on higher affected person outcomes.
Photograph: Wavebreakmedia, Getty Photos
