Hospitals accused of payroll manipulation

An employee class-action lawsuit claims Underwood Memorial Hospital in New Jersey illegally docked pay, reported the Philadelphia Business Journal. Another case against Pacific Health Corp. in California raises similar concerns about payroll management and practices.

According to the Journal, the Underwood suit claims that a computerized payroll systems tracks when employees clock in, and is used as part a shadow disciplinary system that pressures any hourly employee considered even a minute or two late to dock their pay by a quarter hour to avoid more serious sanctions.

The lawsuit said the system is used to "alter the seemingly neutral rounding system in a manner which transforms the rounding system into a system that is substantially rigged in the [hospital's] favor," the Journal reported.

In California, the state Department of Industrial Relations fined the Pacific Health Corp. hospital chain $7 million for not paying employees and bouncing their paychecks, the Los Angeles Times reported.

Pacific Health, which operates seven hospitals in Southern California, was fined $524,300--the amount it underpaid employees--and an additional $6.5 million for failing to provide accurate wage statements for its workers, according to the Times.

The Times also reported that Pacific Health was also withholding money from employee paychecks to pay insurance premiums, but not making the payments.

"Employers have an obligation to pay workers the wages they've earned," Christine Baker, director of the California Department of Industrial Relations, told the Times. "Forcing employees to wait for payment or depriving them of promised benefits are illegal acts and cause unacceptable hardship."

To learn more:
- read the Philadelphia Business Journal article
- read the Los Angeles Times article

Suggested Articles

Civica Rx, the non-profit generics company launched last year by hospitals, is ahead of schedule with the planned production of new drugs.

The Senate Finance Committee has finally unveiled its long-awaited legislation on drug prices. 

Amazon Web Services executive Shez Partovi, M.D., spoke with FierceHealthcare where he thinks AWS can make the biggest impact in healthcare.