California Therapy Provider Cited $9M for Misclassifying 1,280 Employees

The California Labor Commissioner’s Office cited Feld Care Therapy Inc. in Westlake Village. More than $9 million for misclassifying 1,280 speech, physical and occupational therapists as independent contractors.

The part-time workers, who traveled to clients’ homes to provide care, were not given paid sick leave or California’s COVID-19 Supplemental Paid Sick Leave as required by law, according to Labor Commissioner’s Office.

The Labor Commissioner’s Office opened its investigation into Feld Care Therapy, dba FeldCare Connects, in November 2020 after receiving a report of labor law violation that the company was incorrectly classifying employees as independent contractors.

The Labor Commissioner’s Bureau of Field Enforcement conducted an audit of the company’s records from 2019 to 2022 and reportedly uncovered the willful misclassification and other violations, including workers not being provided with complete itemized wage statements.

Feld Care Therapy and CEO Randi Peled are jointly and severally liable for $1,134,500 in damages owed to the 1,280 workers and a civil penalty of $1,677,500 for the violation of the itemized statement provision.

Feld Care Therapy is liable for damages of $1,707,350 for failure to provide written notice of sick leave balance and usage, $1,554,850 for the violation of the supplemental sick leave provisions and $256,900 for paid sick leave recordkeeping requirements. Feld Care Therapy, Inc. is also liable for civil penalties of $2,710,000 for willful misclassification of employees as independent contractors.

Civil penalties collected are transferred to the state’s general fund.

Misclassification occurs when an employer improperly classifies their employees as independent contractors to avoid paying minimum wage, overtime or payroll taxes. A misclassified worker is denied the legal right to workers’ compensation coverage if injured on the job, the right to family leave, the right to unemployment insurance, the right to organize or join a union and protection against employer retaliation.

Enforcement investigations typically include a payroll audit of the previous three years to determine minimum wage, overtime and other labor law violations, and to calculate payments owed and penalties due.

Topics California