TAMPA, Fla. (August 4, 2023) – Gale Healthcare Solutions, as part of a coalition of technology-enabled healthcare staffing platforms, submitted a letter to the U.S. Department of Labor (DOL) on August 3, calling on the agency to clarify the worker classification guidelines for temporary healthcare workers in post-acute and long-term care facilities.
The letter to Acting Secretary Su, signed by senior leaders from 30 companies with support from the American Staffing Association, asks the DOL to issue a formal Opinion Letter to provide immediate guidance regarding the classification of temporary healthcare workers in post-acute care facilities as employees rather than independent contractors. (See the full letter here.)
Nurses and nursing assistants have historically been classified as W-2 employees due to the highly regulated nature of the healthcare industry. However, with the emergence of digital platforms that match workers with healthcare providers, some newer digital staffing companies are classifying their workers as independent contractors. This model allows them to avoid employer-related responsibilities and expenses, resulting in a competitive advantage.
In the letter, the coalition asserts that classifying temporary nursing staff working in post-acute healthcare settings as independent contractors is a violation of the Fair Labor Standards Act.
“We need clarity from the Department of Labor - once and for all - that this practice is wrong, and enforcement that puts it to a stop,” said Tony Braswell, president and founder of Gale Healthcare Solutions. “Without it, we can expect a race to the bottom that puts more stress on our healthcare system and steadily erodes the quality of patient care.”
When nurses are classified as independent contractors, they miss out on critical workplace protections, such as overtime, employer-paid taxes, unemployment benefits, workers compensation insurance and healthcare options. Because they are considered a “joint employer” of the workers, healthcare providers can be held accountable and face steep legal and financial consequences.
Because independent contractors cannot be required to complete education and training requirements and cannot be supervised, the result can be diminished quality of care for patients.
“Companies who treat temporary nursing staff as independent contractors are putting profits over people,” said Braswell. “Independent contractors are key to many parts of our economy, but they are not appropriate for nurses providing bedside care in nursing homes.”
Temporary staffing platforms are an important tool for filling the gaps left by the national nursing shortage, making it even more important these platforms classify their nurses correctly. The American Health Care Association’s latest report on the state of the nursing home industry highlights what is at stake:
- Nursing homes lost 210,000 jobs from February 2020 to December 2020, the worst job loss of any health care sector during the pandemic.
- Workforce levels are the lowest reported since 1994.
- Current estimates show the nursing home workforce would not return to pre-pandemic levels until 2027.
- 84 percent of nursing homes report they are facing moderate to high levels of staffing shortages.
The request comes as the DOL prepares to finalize new guidelines for determining if workers should be classified as an employee or an independent contractor under the Fair Labor Standards Act. In October 2022, the DOL announced a notice of proposed rulemaking to update these guidelines. The 2023 Spring Regulatory Agenda shows the rule is scheduled for August 2023, however, the latest reports indicate it will be delayed.
In their letter, the Coalition notes the proposed rule reinforces the position that temporary nursing staff in post-acute settings should be classified as employees.