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USDOL Recovers $934,000 in overtime wages plus $104,000 in penalties from UnitedHealthcare

USDOL Recovers $934,000 in overtime wages plus $104,000 in penalties from UnitedHealthcare

Earlier this month, the United States Department of Labor (USDOL) announced the end of an exhaustive investigation into employment practices at UnitedHealthcare’s main office in Hartford, Connecticut.  During this investigation, the USDOL interviewed 90 employees and examined compensation records for 21,000 employees.  The end result was the payment of over 1 million dollars in back wages and penalties by UnitedHealthcare, according to the USDOL.

The USDOL reports that its “investigators determined that UnitedHealthcare incorrectly classified employees in several different occupational categories as administratively exempt” thereby denying the workers overtime compensation.  In addition, the USDOL indicated that it located record keeping and other violations.

Insurers should take note of the UnitedHealthcare investigation and end result.  Clearly, the investigation alone cost the company hundreds of thousands of dollars to defend, not including the opportunity cost suffered by having to produce the exhaustive records and facilitate the investigation.  The lesson learned here is fairly simple:  employers must re-examine the classification of their employees.  The USDOL’s enforcement agenda has emphasized, year after year, that the USDOL will increase funding to locate and correct misclassification of employees as either non-exempt or independent contractors.  This is clearly a case where an ounce of prevention will go a long way to avoiding the cost of correction.