Robin Pikala became the face of wage theft in Minnesota when she spoke at a news conference at the state Capitol a year ago. She was one of 800 workers owed a total of $1.4 million by Crystal Care, one of the state’s largest home health care agencies.
“For 45 days, we worked without pay,” Pikala recalls. “And about a week later, they filed for bankruptcy … By the time they paid the lawyers, the bank that they owed, there was nothing left for us.”
Pikala told her story at a news conference where lawmakers announced plans to introduce legislation to crack down on wage theft. She joined workers from retail and construction who also had been cheated out of hard-earned pay.
The case of Richfield-based Crystal Care is notable for the number of people affected and the amount of money owed, but it’s by no means unusual in the home health care industry. A review of state Department of Labor and Industry records for the past five years shows scores of complaints and enforcement actions against companies in the industry, adding up to tens of thousands of dollars.
In one case from 2013, Accurate Home Care, LLC did not pay 33 employees overtime wages (1.5 times their hourly pay) for hours worked over 48 hours per week. Instead, the company paid employees quarterly bonuses based on the number of extra shifts they took. These bonuses did not add up to what employees would have made under state overtime law and they were ultimately owed $94,783.64.
Home health care is a growing area of employment in Minnesota, due to the effort to move people with disabilities out of large institutions and provide for their care at home. Much of the funding comes from Medicaid and is administered through the state Department of Human Services, which awards money to agencies on a per-patient basis. The agencies directly employ personal care attendants and also serve as fiscal intermediaries for individuals who hire their own PCAs.
About 500 companies currently provide home health care in Minnesota. The business can be lucrative, said Francis Hall, who has worked as a PCA for 15 years. The state might reimburse an agency $17.04 an hour for home care, while they pay the home care worker $10.75 an hour, she said.
“There are some companies out there that are very substantial and do everything by the book,” Hall said in an interview with Workday. “Then there are these other companies that really don’t care. They’re basically just out there for the money.”
She has witnessed several cases of wage theft, including an agency in Brainerd that operated under one name, then re-opened under another. Along the way, it stopped paying employees.
“It was a lot of money,” said Hall. “People were owed anywhere from $600-$700 for part-time workers, up to $3,000 or more for full-time workers that were working 48 hours a week.”
Now an executive board member of SEIU Healthcare Minnesota, a union representing 26,000 home health care workers in the state, Hall gathered information and tried to help the workers. It was frustrating, she said.
The Department of Human Services is focused on client care, not ensuring that workers get paid. The Department of Labor and Industry requires workers to wait 31 days before it will investigate.
While the workers were not being paid, many of them continued to care for their clients. The same was true at Crystal Care.
PCAs form strong bonds with their clients, Hall noted, “especially if they’ve been working with them for a long time. They’re not going to abandon their client.”
At the same time, the PCAs struggled to make rent, car payments and other bills without a paycheck. They talked to lawyers and appealed to public officials for help, Pikala said. They found support at SEIU Healthcare Minnesota, voting for union representation in August 2014.
The Crystal Care workers have never gotten back the wages that were stolen from them, but PCAs now have a watchdog to prevent such theft from happening in the future, said Jamie Gulley, president of the union.
“Now that we have a contract in place, the union is able to ensure that people are paid appropriately each pay period,” filing a grievance if necessary, he said.
“It would be very difficult for a situation like Crystal Care to occur again for workers that are covered by the union because we would know immediately if somebody didn’t get paid and we would be able to intervene and go to the State of Minnesota and ensure that the state was able to step in at an early moment.”
The union also is on the lookout for other forms of wage theft, Gulley noted.
“Agencies like Crystal Care will oftentimes tell workers they’re not due overtime that they should be receiving or ask them to sign waivers or ask them to sign time sheets that don’t include all of the hours they worked,” he said. “That money is just going to the agency. That is some agencies’ business model – screw the workers.”
While a union provides some protection, other safeguards are needed, especially in cases where companies go bankrupt, Gulley said. The union believes home care companies should be required to post a bond or carry insurance so that wages are paid in those circumstances.
That is one of the provisions in the wage theft bill introduced last year by Senator David Tomassoni, DFL-Chisholm, and Representative Carly Melin, DFL-Hibbing. Other provisions include higher penalties for wage theft and revocation of business licenses for repeat offenders. The Legislature has taken no action on the bill.
An investigation by Workday Minnesota found wage theft is larger and more widespread than most people realize. Minnesotans are losing millions of dollars every year.