A company hired by the state failed to pay minimum wage and overtime to workers who care for elderly or disabled Medicaid recipients and did not pay the workers for all of the time they worked, a lawsuit filed Thursday claims.
The lawsuit filed by one current and one former worker also says the company, Little Rock-based Palco, pocketed money from the state that should have been paid to the workers.
The lawsuit was filed against Palco in U.S. District Court in Little Rock and seeks class-action status on behalf of all people who were paid as caregivers by the company under the Independent Choices Medicaid program within the past three years.
A message left at the company's office Thursday afternoon seeking comment wasn't returned.
About 3,000 Medicaid recipients receive in-home services, such as help with daily living tasks, through Independent Choices, Marci Manley, a spokesman for the state Department of Human Services, said in an email.
Under the program, the Medicaid recipient is considered the employer, she said. Often the worker is a relative or friend of the recipient.
"Palco's function is to process payroll on behalf of the beneficiary and to help the beneficiary be the employer," Manley said.
She said the recipient sets the worker's wage, which must be at least the minimum wage.
According to a form on Palco's website, workers who live with the Medicaid recipient at least five days a week are not required by the U.S. Department of Labor to be paid an overtime rate for working more than 40 hours a week.
Attorney Chris Burks of North Little Rock, who filed the lawsuit, said in a phone interview Thursday that Palco, rather than the Medicaid recipient, is actually the worker's employer "according to the test of the labor law" and that the workers should be paid overtime.
"Palco dictates how these people provide care, how many hours they provide care. They take their time sheets, they pay them," he said.
The lawsuit says the plaintiffs and other workers have regularly worked more than 40 hours a week and weren't paid one-and-a-half times their normal wage as required under federal law.
It also said Palco's "commonly applied practice" was to pay workers for only some of the hours they worked. The lawsuit seeks monetary damages for the overtime and unpaid work hours, and attorneys fees.
Most Medicaid recipients who participate in Independent Choices are also enrolled in ARChoices, which provides in-home care to recipients with disabilities significant enough that they qualify for nursing home placement.
Rather than hiring a worker directly through Independent Choices, Medicaid recipients who qualify for such in-home care can also receive the services of an agency that employs or contracts with home-care workers.
In a federal lawsuit in 2016, a former financial counselor with Palco claimed that the company failed to pay her and other counselors for time spent traveling to Medicaid recipients' homes.
Without admitting wrongdoing, the company settled the case last year, agreeing to pay 22 people who had worked as financial counselors a total of $17,925, along with $6,575 in attorneys fees and costs.
Metro on 05/03/2019
Print Headline: Firm kept state funds, didn't pay care workers enough, lawsuit says