SANTA MARIA, CA – A federal investigation has found the owner and operator of five central California residential care homes denied overtime wages to 42 caregivers by requiring them to sign away their rights to overtime in exchange for an extra $1 per hour worked and creating a second payroll to hide the fraud.

Investigators from the U.S. Department of Labor’s Wage and Hour Division determined Santa Maria-based Bauer Residential Inc. and its president, Mihaela Bauer, took deliberate steps to avoid paying the overtime rate of time and one-half for hours over 40 in a workweek, as required by the Fair Labor Standards Act. They also learned Bauer made employees sign an agreement to forego the overtime rate and accept just $1 more per hour over their regular pay.

“Too often, the Wage and Hour Division finds employers of care workers taking advantage of people who provide essential care to those in need,” said Wage and Hour Division Assistant District Director Eduardo Huerta in Los Angeles. “Bauer Residential Inc.’s flagrant denial of overtime pay to 42 employees violated their rights to be paid fully and legally under federal law. An employer cannot force an employee to give up their legally protected wages in any manner, including by signing a form.”

Investigators also learned the employer failed to keep accurate records of employees’ hours worked and created separate timesheets for some employees, resulting in additional recordkeeping violations.

In total, the division recovered $545,655 in back wages and liquidated damages for the affected caregivers, whose payments in back wages and damages ranged from $124 to $22,477. The division also assessed — and Bauer Residential Inc. has paid — $24,402 in civil money penalties for the employer’s willful violations.

“Our investigation recovered hard-earned wages for dozens of workers who dedicate themselves to caring for others and held their employer to account for illegal pay practices,” Huerta added.

The investigation included all five of Bauer Residential Inc.’s locations in Santa Maria at 943 Sunrise Drive, 3842 Mira Loma Drive, 1910 Olive Drive and 572 Inger Drive; and Nipomo at 890 Prosperity Way. Founded in 2003, the company operates assisted living and adult residential care homes.

In fiscal year 2022, the division recovered $14.9 million in back wages for more than 22,000 workers across the nation in the healthcare industry, known for both low wages and high rates of violations. As the U.S. population ages and demand for healthcare services increases, employment in a variety of healthcare sectors is projected to grow 13 percent from 2021 to 2031 – faster than the average for all occupations – adding about 2 million new jobs. 

The division enforces the law regardless of a worker’s immigration status and can speak confidentially with callers in more than 200 languages. For more information about the FLSA and other laws enforced by the division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division.

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