From JDSupra, Richard Reibstein discusses whether nurses can be properly classified as independent contractors under the Fair Labor Standards Act (FLSA) and discusses a case in which nurses allege that they werer misclassified. Richard writes:
One of the most important legal developments last month is a new lawsuit filed by registered nurses against a leading health care system alleging that they have been misclassified as independent contractors instead of employees. The proposed class and collective action was filed late last month in a federal district court in the state of Washington by a registered nurse (RN), who alleges that the health care system in which she worked, directed, and controlled contract RNs, who perform duties similar to the RNs employed by the system. As noted in our blog post on March 7, 2024, this new case comes on the heels of another lawsuit being prosecuted by the U.S. Department of Labor asserting that an Illinois health care staffing agency misclassified RNs and other nurses who provided services to nursing homes. These lawsuits do not, however, suggest that all nurses must be classified as employees. Indeed, in July 2018, we reported in a blog post that the Labor Department issued a Field Assistance Bulletin addressing the issue of whether nurses referred by nursing registries are employees of the registries or are independent contractors. That publication concluded that there were instances where the nurses may be independent contractors under the federal Fair Labor Standards Act. To that end, in an article published in Law360 Employment Authority dated February 8, 2022, author Max Kutner discussed how the nation is facing a nurse shortage but online staffing platforms are seeking to meet that need with opportunities for nurses to provide their services as independent contractors. Regarding the specter of misclassification claims, the publisher of this blog was quoted in the article: “You can have nurses who are independent contractors legitimately, and you can have nurses who are not legitimately independent contractors, who are misclassified. You shoot yourself in the foot if you don’t have an independent contractor agreement that is state-of-the-art.” Health care entities can oftentimes structure and document their IC relationships with nurses in this fashion by use of a process such as IC Diagnostics (TM) – even when, as alleged in the new lawsuit described below, the health care entity also considers some nurses to be employees.
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HEALTH CARE SYSTEM SUED IN CLASS AND COLLECTIVE ACTION BY REGISTERED NURSE ALLEGEDLY MISCLASSIFIED AS AN INDEPENDENT CONTRACTOR. Providence St. Joseph Health, an extensive health care system, has been sued in a proposed class and collective action lawsuit brought in a Washington federal district court by an Oregon-based registered nurse claiming that he and other similarly situated nurses were misclassified as independent contractors. The plaintiff nurse alleges that the health care system failed to pay him overtime compensation for hours worked over 40 in a workweek in violation of the Fair Labor Standards Act and Oregon state law. He claims that Providence St. Joseph advertises on its website that its caregivers are employees: “Together, our 122,000 caregivers (all employees) serve in 51 hospitals, 1,000 clinics and a comprehensive range of health and social services across Alaska, California, Montana, New Mexico, Oregon, Texas and Washington.” According to the class and collective action complaint, Providence St. Joseph controls and directs all aspects of the services by RNs who have been classified as ICs; employs numerous other RNs and similar patient care workers, which it classifies as employees, to perform the same or similar functions as the plaintiff and those similarly situated to him; requires adherence to company policies and procedures; and maintains control, oversight and direction of the contract RNs, including their hiring, firing, and discipline. The plaintiff also alleges that he and those similarly situated RNs are supervised by Providence personnel, have no opportunity for profit or loss, and cannot subcontract their work to others. Ward v. Providence St. Joseph Health, No. 2:24-cv-01528 (W.D. Wash. Sept. 24, 2024).
