If President Obama wants to give the employees of federal contractors a raise, the people working at healthcare.gov’s call centers may be a good place to start.
Nine workers at a call center in Boise, Idaho, say they were wrongly denied overtime pay while working 50- or 60-hour weeks and are suing Maximus (MMS), the Reston (Va.) contractor running the 1,800-employee website.
The complaint, filed Jan. 24 in federal district court in Idaho, argues that the plaintiffs and hundreds of other low-level employees were “wrongfully classified as exempt from overtime compensation” under federal labor laws. The suit seeks at least $5 million in compensation and damages.
In an e-mailed statement, Maximus spokesman Blake Travis wrote that the company hasn’t yet been served with the complaint, “but we are already investigating the matter. Our company policy is to comply with all applicable labor laws.”
A separate lawsuit brought last year by a Maximus call center employee in Texas also claimed that the company wrongly classified workers as exempt from overtime pay. Settlement talks in that case are ongoing, according to court filings.
The Fair Labor Standards Act generally requires workers to be paid overtime if they’re clocking more than 40 hours per week. The law provides exemptions for certain categories of workers, including administrative employees who earn at least $455 a week, or $23,660 a year. Exempt employees must also be involved in managing business operations and have a degree of independent authority.
The Maximus employees bringing the latest suit, who worked as trainers and front-line supervisors of the people answering the healthcare.gov hotline, made substantially more than the minimum salary required, in the range of $38,000 to $42,500 annually, according to the complaint.
But the suit argues that they did not meet the law’s other requirements for being exempt from overtime pay. “They are tightly controlled by Maximus policy and by their managers, they do not exercise discretion or independent judgement … and the job duties are not directly related to the company’s management policies or general business operations,” the complaint says.
If the trainers and supervisors were considered nonexempt hourly workers, they would get overtime pay. The suit alleges that the plaintiffs routinely worked 50 or 60 hours a week starting in August, with shifts that began at 5 a.m. and ended between 3 p.m. and 5 p.m. Meetings would be scheduled at the end of their shifts, requiring them to stay later, and the plaintiffs worked as many as 24 hours on the frantic weekend before Christmas. That’s when the White House was racing to get Americans to sign up for health plans beginning Jan. 1—and a lot of people were calling the hotline.
Maximus, with revenue of $1.3 billion in 2013, has business with several federal agencies, including the Department of Education, the Social Security Administration, and the Health and Human Services Department, according to data compiled by Bloomberg Government. In September the company won a contract with HHS to manage the appeals process for people applying for coverage on healthcare.gov. The contract, for $43 million in the first year, may be worth as much as $383 million over five years.
Obama said in the State of the Union address that he will raise the minimum wage at private companies under contract with the federal government to $10.10 per hour by executive order. Another change he could make without Congress’s help: making more employees eligible for overtime pay. The Labor Department could raise the salary threshold for exempt workers. That would make employers raise their annual pay accordingly, pay them extra for overtime, or cap their hours at 40 per week. And it would apply not just to federal contractors but to all employers.