The Labor Commissioner’s Office has cited Feld Care Therapy, Inc., located in Westlake Village, $9,041,100 for willfully 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 (SPSL) as required by law.

The Labor Commissioner’s Office opened its investigation into Feld Care Therapy, Inc., 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 uncovered the willful misclassification and other violations, including workers not being provided with complete itemized wage statements.

Feld Care Therapy, Inc. 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, Inc. is liable for damages of $1,707,350 for failure to provide written notice of sick leave balance/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 as required by lCEO Randi Peledaw.

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. Misclassification also undermines businesses that play by the rules.

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.

In perhaps a related civil action, Arizona Graves filed a lawsuit in the Los Angeles Superior Court on September 20, 2021 against Feld Care Therapy, Inc. and its CEO Randi Peled, on behalf of herself and other aggrieved employees under the Public Attorney General Act.

She claimed she was employed by Feld Care Therapy from February 2019 until April 2020. She alleges that they failed to compensate her for all hours worked, missed meal periods and rest breaks. She also alleges that defendants failed to provide accurate wage statements, failed to keep accurate records, failed to pay overtime premiums, failed to pay at least minimum wage, did not pay all wages due upon resignation, and did not reimburse employees for necessary business expenses.

Prior to commencing a civil action for PAGA recovery, “[t]he aggrieved employee or representative shall give written notice by online filing with the Labor and Workforce Development Agency and by certified mail to the employer of the specific provisions of this code alleged to have been violated, including the facts and theories to support the alleged violation.” Lab. Code § 2699.3. One might assume that this notice was indeed provided as required.

Both parties filed a Request for Dismissal of this Action in August 2022, and the case was accordingly dismissed. It is worthy of note that the Labor Commissioner’s office opened its investigation into the case in November 2020, which predates the filing of her civil action.

Labor Code § 2699.3 (2)(a)(i) provides that “If the division issues a citation, the employee may not commence an action pursuant to Section 2699”. Thus her PAGA civil action she filed would at this time be inconsistent with the Citation which was announced to the public on March 7, 2023, and consistent with the Request for Dismissal filed by both parties in the Civil Action.

Home Health Care Provider Cited for $9M for Employee Misclassification