Kaiser Uses Title Alone for Tax Status, Class Says

SAN DIEGO, Calif. (CN) - Certain Kaiser Foundation Hospital Inc. employees were paid an exempt-status salary, but performed non-exempt tasks, according to a San Diego Superior Court class action lawsuit.

Lead plaintiff Adam Hardesty was employed at a San Diego County Kaiser hospital as a "project manager" from August 2012 to February 2013.

Hardesty states in his complaint that despite the title, employees had little to no authority, never served in a supervisory role and were otherwise "engaged in a type of work that required no exercise of independent judgment or discretion as to any matter of significance."

Instead, Kaiser project managers performed a "finite" set of non-exempt tasks that included transcribing written and electronic prescriptions, completing patient profile entries and notes, sending requests to doctors for medication refills and were even expected to troubleshoot the pharmacy computer system, all on top of "daily debriefing" conference calls.

"As a matter of company policy, practice and procedure, Kaiser unlawfully, unfairly and/or deceptively classified every project manager as exempt based on job title alone, failed to pay the required overtime compensation and otherwise failed to comply with all labor laws with respect to these project managers," the complaint states.

Hardesty alleges Kaiser operates the scheme to save money and be more competitive in the health care industry.

"To successfully compete against the other health care service providers, Kaiser substantially reduced its labor costs by placing the burden of overtime work on a smaller number of salaried employees that Kaiser classified as exempt from overtime wages and other related benefits . . . the requirement to pay overtime wages extends beyond the benefits individual workers receive because overtime wages discourage employers from concentrating work in a few overburdened hands and encourages employers to instead hire additional employees," the complaint states.

In addition, the complaint alleges Kaiser did not provide the class compensation for missed meal and rest breaks, and did not provide accurate and itemized wage statements showing gross and net wages, hourly rates for regular and overtime hours or the corresponding hours worked at each hourly rate.

Hardesty is suing for violations of California's Unfair Competition Laws under California's Business and Professions code. He wants the court to enjoin Kaiser from continuing its practice of labeling employees as exempt by title only, to order Kaiser to correctly calculate and pay all wages due, and to disgorge "ill-gotten gains into a fluid fund for restitution" according to proof.

Norman B. Blumenthal, Kyle R. Nordrehaug and Aparajit Bhowmik, of La Jolla, Calif., represent the plaintiff.

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