$1.5 Million Paid for California Overtime and Per Diem Suit

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According to a California federal court filing, a medical staffing company recently agreed to a $1.5 million settlement in a California overtime class action.

Details of the Case: Hubbard v. RCM Technologies (USA), Inc.

Court: United States District Court Northern District of California.

Case No.: 4:19-cv-06363

Allegations in the Case: Hubbard v. RCM Technologies (USA), Inc.

Plaintiffs in the case allege they were shortchanged by the medical staffing company that employed them. The workers allege the company violated labor law; failing to provide proper overtime pay while employees were on travel assignments. According to the workers involved in the case, the alleged overtime law violations were a result of the company failing to factor in the employees’ per diems for base-pay rates. In short, medical workers claim the company, RCM Technologies (USA) Inc., miscalculated overtime wages. The group of medical workers recently called for preliminary approval of a settlement with the employer, RCM Technologies (USA) Inc.

Protracted Negotiations Resulted in Compromise and Settlement Terms:

While the negotiations were described as “protracted,” the health care workers eventually concluded that based on the size of the risk associated with attempting to recover the maximum amount they sought with the suit, a compromise was justified. For the purposes of the settlement, the plaintiffs were willing to agree with the terms and come to an agreement. Rhonda Hubbard filed the original lawsuit in October 2019 citing that RCM violated California labor law and California business laws associated with failing to pay accurate overtime pay.

The Class Members: Over 300 California Workers Employed by RCM

The certified class members numbered over 300. The class included any workers employed by RCM in California on a nonexempt, hourly basis during the four years before the lawsuit was filed (through class certification), and received overtime pay and a weekly per diem or stipend from RCM. According to the preliminary terms of the $1.5 million settlement, each class member can expect to receive approximately $3,110. Hubbard receives a $10,000 service award, and the attorneys are provided up to $500,000 in attorneys fees, and $20,000 in litigation costs.

Considering Per Diems & Overtime Pay:

Should per diems always be factored into a California employee’s regular rate of pay for overtime calculations? The preliminary settlement occurred before the court provided an answer on the question at the heart of this case. However, In February, the Ninth Circuit ruled that per diem pay should have been considered part of the worker’s bae pay rate. Regardless, Hubbard wasn’t sure she could depend on the Ninth Circuit ruling to guarantee her class action’s success in litigation continued, since the Ninth Circuit also found that the inclusion of per diem for the purposes of calculating overtime should be considered on a case-by-case basis.

If you have questions about California labor law violations or how employment law protects you against labor law violations, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.