Stop FLSA Lawsuits Before They Start
The Labor Law Landscape in America
At the federal level, the Fair Labor Standards Act (FLSA) sets the baseline for minimum wage, overtime pay, recordkeeping, and child labor standards. It’s enforced by the Department of Labor (DOL), which has made misclassification of independent contractors one of its top enforcement priorities.
But that’s just the start. Agencies also face:
- State labor laws, many of which are even stricter than federal standards.
- Wage & hour collective actions, where one complaint can snowball into lawsuits involving dozens of workers.
- Aggressive plaintiff attorneys, who specialize in exploiting technical missteps in classification and agreements.
- Regulatory audits and investigations, triggered by a single complaint.
The result? A labor law environment where even a small mistake can have massive financial consequences.
This isn’t theory — every week, home health agencies across the country are being targeted for misclassification, unpaid overtime, and wage violations. Many face six- and seven-figure lawsuits. Some don’t survive them.
Home Health Care Agencies Face Rising FLSA Lawsuit Risk Over Misclassified Independent Contractors
Home health care agencies are one of the top targets for Fair Labor Standards Act (FLSA) lawsuits. Why? Because many agencies use boilerplate independent contractor (1099) contracts which often fail the Department of Labor’s (DOL) economical realities test.
The Outcome
What Happens When Agencies Fail the Economic Realities Test
The Department of Labor (DOL) uses the economic realities test to determine whether a worker is truly an independent contractor or an employee under the Fair Labor Standards Act (FLSA).
If your home health care agency fails this test, here’s what happens:
Workers are Reclassified as Employees
- Caregivers you treated as independent contractors are deemed W2 employees.
- This means they should have been paid minimum wage, overtime, and other employee protections.
Back Wages are Owed
- You may owe 2–3 years of back pay to each misclassified worker.
- This includes unpaid overtime (time-and-a-half after 40 hours).
Double (Liquidated) Damages
- Under the FLSA, damages are often doubled.
- Example: If you owe $100,000 in back pay, you could be ordered to pay $200,000 total.
Attorney’s Fees and Court Costs
- Agencies must also pay the plaintiff’s attorney’s fees, which can exceed the wages owed.
Collective Actions (Class Actions)
- One worker can trigger a §216(b) collective action.
- Dozens (or even hundreds) of current and former workers can join the lawsuit, multiplying liability.
DOL Investigations and Audits
- A single complaint can trigger a full agency audit.
- This means the DOL will review all of your worker classifications, payroll records, and HR practices.
Business-Damaging Outcomes
- Six- and seven-figure settlements are common.
- Agencies risk bankruptcy, forced closure, or sale at a loss if they can’t cover the judgment.
The Real Cost of One Misclassified Worker
One Misclassified Worker Can Cost
$50k–$100k+
Many agency owners think, “It’s just one caregiver — how bad could it be?”
Under the FLSA, one misclassified worker can cost your agency $50,000–$100,000+. Here’s why:
Back Pay for Wages and Overtime
If a caregiver worked 50 hours a week but was paid as a contractor, you may owe 2–3 years of unpaid overtime.
Liquidated (Double) Damages
- The FLSA allows courts to double the amount owed as a penalty.
- Example: $25,000 in unpaid wages = $50,000 total liability.
Attorney’s Fees
- You’re also responsible for the plaintiff’s lawyer fees, which can easily add $10,000–$30,000+ to the bill.
Ripple Effect of a Collective Action
- If one worker files under FLSA §216(b), others can join.
- Ten caregivers joining the same lawsuit? That $50,000 case suddenly becomes half a million dollars or more.
IT GETS WORSE!
A Collective Action Could Put Your Entire Agency at Risk
Under the FLSA, lawsuits don’t stop with a single caregiver.
Here’s how it works:
One Worker Files a Complaint
- A caregiver claims they were misclassified as an independent contractor and weren’t paid overtime.
The Case Becomes a Collective Action (§216(b))
- The court allows other current and former workers to join the lawsuit.
- Lawyers actively solicit your workforce to sign on.
Dozens of Caregivers Join In
- What started as one worker’s complaint can suddenly include 10, 20, or even 100 caregivers.
Your Liability Multiplies Overnight
- Instead of $50k–$100k for one worker, you’re facing hundreds of thousands — even millions in back pay, damages, and attorney’s fees.
Business-Threatening Outcomes
- Owners are forced into expensive settlements just to survive.
- Some agencies lose contracts, face damaged reputations, or even shut down.
FLSA Liability Can Follow You Home
If your agency can’t pay, plaintiffs may pursue your personal assets — including bank accounts, cars, and even property (state protections vary).
The risk doesn’t stop at your business. It can follow you home.
Our Proven 2-Part Solution
Part 1: Our Patent-Pending Implementation Process
Even the strongest contract can fail if it isn’t implemented correctly. Plaintiff attorneys know this — which is why one of their first moves is to argue that workers never truly agreed to the terms. If the contract is thrown out, you’re left exposed.
That’s why Kubera HR Solutions developed a custom implementation process (Patent Pending) that is not only airtight but also evidence heavy — giving you the documentation you need to prove your agreements are valid and enforceable.
Why Our Process Works
- Prevents Contract Defenses
Blocks the most common arguments used to invalidate agreements, such as lack of notice, lack of consent, or unfair surprise. - Evidence-Driven
Every step of the process creates a trail of admissible evidence — proof that your workers received, understood, and accepted the terms. This evidence is what courts look for when deciding whether to enforce a contract. - Creates Enforceability
Agreements rolled out through our process have stood up against legal challenges, making them far more enforceable than standard HR documents. - Reduces Risk Without Disruption
Implementation is quick, seamless, and requires little to no disruption in your day-to-day operations. - Backed by Legal Strategy
Built on the latest case law and Federal Circuit standards, our process gives you a proven advantage if challenged.
Part 2: Our Solution: Independent Contractor Agreements That Actually Work
Most agencies know their independent contractor agreements are weak — and the DOL knows it too. Generic contracts do little to prevent misclassification lawsuits. That’s why we created our proprietary independent contractor agreements designed specifically to protect home health care agencies from FLSA attacks.
These aren’t cookie-cutter forms. They’re carefully engineered legal tools with built-in, self-actuating protections that minimize risk before a lawsuit ever starts.
What Makes Our Agreements Different
Class Action Waivers
Protect your agency from collective (class) actions that multiply liability.
Self-Actuating Misclassification Protection
Our agreements automatically address — and reduce — the very factors courts use to determine misclassification.
Behavior Controls for Contractors
Built-in terms that prevent contractors (and their employees) from engaging in practices that trigger misclassification findings.
Mandatory Oversight Requirements
Contractor management is required to oversee compliance with all “misclassification provisions,” reducing hidden liability.
Audit Rights with Remedies
You (or your designee) maintain the right to audit contractor compliance, with remedies for non-compliance.
Defense-Ready Affidavits
Our agreements come with admissible affidavits you can use in defense of:
- Misclassification claims
- Wage & Hour collective actions
- Any administrative or legal Wage & Hour violation
Discover Our Process
Step 1
Initial Consultation
Step 2
Custom Program Design
Step 3
Implementation & Support