News Release

OPA News Release: [11/19/2002]
Contact Name: Yvonne Ralsky
Phone Number: (202) 693-4676

RehabCare Group To Pay Employees $2.85 Million

WASHINGTON -- A total of 7,883 current and former temporary health care workers in 37 states employed by subsidiaries of RehabCare Group, Inc., headquartered in St. Louis, Mo., will share $2.85 million in back wage compensation as part of a major settlement reached on Nov. 7, 2002, between the U.S. Labor Department and the nationwide firm, its ten subsidiaries and Maurice Arbelaez all known as StarMed. Arbelaez is the former president of the staffing division for StarMed.

"The quality of patient care and the quality of working conditions for health care workers are linked," said U.S. Secretary of Labor Elaine L. Chao. "We are committed to protecting all workers to ensure they are paid their rightful wages, especially those who work in the care of others." .

The department's Wage and Hour Division conducted an investigation at four StarMed facilities in the spring of 2001, and found that some temporary workers were being paid "straight time" for all hours worked, and were not paid overtime as required by the Fair Labor Standards Act. For example, the temporary workers often worked at more than one location during the week, and RehabCare's payroll systems did not track the total number of hours employees worked during a week. During the investigation, RehabCare realized that this problem existed in other facilities, and approached the department to discuss ways in which to correct it. RehabCare made changes to its payroll systems, and then conducted a self-audit to determine which employees were entitled to back pay for overtime hours. The Wage and Hour Division confirmed this self-audit process and the resulting back wage amounts..

"The department welcomes cooperative relationships with employers as an efficient and effective way to both protect workers and promote long-term sustaining compliance within a company, " said Wage and Hour Administrator Tammy D. McCutchen. "Such voluntary efforts often preclude extensive litigation and ensure that employees receive back wages in a timelier manner."

The period covered in the settlement is from Jan. 1, 1998 through Dec. 31, 2001. Current and former temporary employees who worked during that period as nurses, nurse aids, therapists, nursing assistants, medical technicians, and other healthcare specialists, may receive compensation under the agreement. Under the terms of the settlement, StarMed, without admission of liability, agreed to compute the back wages and to identify, locate and distribute the payments to the employees beginning Nov. 25, 2002. StarMed has established a toll-free number to facilitate the distribution process. Employees who have reason to believe that the StarMed does not have current address information should contact the company toll free at 800-411-2041.

The Wage and Hour Division of the U.S. Department of Labor enforces the Fair Labor Standards Act (FLSA), including its overtime pay provisions. The FLSA requires covered employers to pay overtime for hours worked in excess of 40 hours in any workweek and to keep adequate time and payroll records. The federal wage and hour law covers more than 90 million workers nationwide.

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