"There was seven people sitting at a long table. They gave us a piece of paper. When I read the paper, it was just basically talking about if we signed the letter and accepted the check, we wouldn't sue them," said Kerrie Helmuth, one of the 318 people the company owed.
Helmuth formerly worked as a Certified Nursing Assistant at Abilene's Windcrest Alzheimer Care Center. She said she got a check for $638 she was owed at the end of last year.
"This company took advantage of its employees by not paying them for all hours worked," said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. "Health care workers are among the lowest-paid employees in the nation, and this employer profited by paying these vulnerable employees less than they were legally due under the Fair Labor Standards Act."
An investigation by the Wage and Hour Division's Abilene Field Office found that the company deducted one hour from employees' pay for lunch periods, even though employees took only half-hour breaks for lunch. Because these unpaid hours were not included in employees' total time worked, overtime hours - those worked beyond 40 in a week - were not correctly calculated or compensated.
Sears Methodist Retirement System President and CEO Keith Perry said that happened as a result of some employees being put into the payroll system incorrectly.
"We caught that error and had already corrected it when the audit was done, but yes, it did happen. We did away with that, we went back to a manual system so now the employees company-wide must clock out for lunch and clock back in," Perry said.
Back wages also were found due to one employee because illegal deductions had been made for uniforms that caused the employee's pay to fall below the federal minimum wage. Finally, the employer failed to maintain accurate time records.
Investigators found violations at the Wesley Court Methodist Retirement Community, Mesa Springs Retirement Village and Health Care Center, and Windcrest Alzheimer Care Center.
In addition to paying all back wages owed, Sears Methodist Retirement System has agreed to comply fully with the FLSA in the future.
The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week.
In general, "hours worked" includes all time an employee must be on duty, or on the employer's premises or at any other prescribed place of work, from the beginning of the first principal work activity to the end of the last principal activity of the workday.
Additionally, the law requires that accurate records of employees' wages, hours and other conditions of employment be maintained.
For more information about the FLSA and other federal wage laws, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243) or the division's Dallas District Office at 817-861-2150. Information also is available at http://www.dol.gov/whd.