WHAT HAPPENED
Two affiliated healthcare plan benefit administration companies have agreed to pay $38.7 million to resolve a class and collective action lawsuit brought by current and former healthcare workers who alleged they were misclassified and denied lawful overtime compensation under the FLSA. The lawsuit was filed in July 2019, meaning this organization carried litigation exposure for seven years before reaching resolution.
WHY IT MATTERS TO YOU
This is one of the largest recent FLSA settlements in the healthcare sector. Worker misclassification is not a minor administrative error. It is a catastrophic financial and legal risk.
Healthcare organizations employing benefit administrators, care coordinators, case managers, utilization review staff, and similar roles routinely apply the FLSA's administrative and professional exemptions. When those exemptions are applied based on job titles rather than actual duties, organizations become vulnerable to exactly this type of class and collective action.
ACTION STEPS FOR HEALTHCARE HR LEADERS
→ Audit classifications now. Review every exempt classification against the employee's actual day-to-day duties, not the job description on paper.
→ Scrutinize the administrative and professional exemptions. Employees must meet both the salary threshold AND the duties test.
→ Map your highest-risk roles. Benefit administrators, care coordinators, case managers, prior authorization staff, and call center employees are common misclassification flashpoints.
→ Train your managers. Supervisors and HR business partners who influence classification decisions need current, practical FLSA training.
→ Establish a safe internal reporting mechanism. Employees who can raise pay concerns internally are less likely to reach out to a plaintiff's attorney first.
→ Engage employment counsel proactively. A wage and hour audit conducted with legal privilege costs a fraction of what litigation costs.
Immediate review recommended.
Citation: Law360 Employment Authority, June 2026 | Pruess v. Presbyterian Health Plan, Inc., 1:19-cv-00629 (D.N.M.)
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