Providers, Legal

Providence Ordered to Pay $200M for ‘Systemic Wage Violations’

More than 33,000 Providence employees filed a class-action complaint against the health system in 2021, alleging that it had been withholding their wages by denying them breaks and rounding down their working hours. Last week, Providence was ordered to pay more than $200 million in damages — a decision that “sends a message to healthcare corporations,” according to an attorney representing the workers.

A Seattle jury has decided that Providence underpaid more than 33,000 of its employees by willfully denying them breaks and rounding down their time on the clock. 

The class-action complaint was filed in 2021 on behalf of Providence nurses, technicians and other hourly employees. The case’s eight-day trial concluded last week, with a county judge ordering the health system to pay more than $200 million.

“It’s not everyday you see a judgment in excess of $200 million against a healthcare company for unpaid wages,” Jason Rittereiser, an attorney who represented Providence’s employees, said in an interview. “I think that sends a message to healthcare corporations — not just in Washington, but across the country — that if they fail to pay their employees, they will be held accountable.”

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The complaint alleged that Providence used a policy — which was discontinued last October — that would pay hourly employees based on the time they work rounded to the nearest 15-minute increment. The health system also had policies in place to “discourage hourly employees from punching in more than seven minutes early for their shift, from punching in after the scheduled start of their shift, or punching out more than seven minutes after the end of their shift or shortly before the end of their shift,” according to the complaint.

Essentially, these policies prevented or discouraged workers from punching the clock in a way that rounding could benefit them — therefore meaning that employees’ working hours were consistently getting rounded down without the chance of ever evening out — the complaint explained.

This policy was in place despite the fact that Providence, like many employers, was using a digital clock to track its employees’ working hours “down to the second,” Rittereiser said.

The complaint also alleged that Providence systematically failed to provide a second meal break for hourly employees who were entitled to one. Per Washington state law, employers are required to ensure staff members get two 30-minute, duty-free meal breaks when they work a shift that is 10.5 hours or longer. Providence did not provide these second meal breaks to employees, yet the health system automatically deducted these breaks that workers should have received from their paychecks, according to the complaint.

“These are systemic wage violations that happened on a small scale each and every day for years. Ultimately, that adds up to be millions and millions of dollars. A single wage violation on behalf of an individual employee could go unnoticed — but the result of this trial speaks to the  massive, systemic size of these wage violations,” Rittereiser explained.

Damages for Providence employees’ unpaid wages totaled about $98 million, but Providence is being ordered to pay much more than that. Under Washington state law, employers must pay double the amount of damages if a judge determines that they made the willful choice to withhold wages — and King County Superior Court Judge Averil Rothrock did just that. 

With statutory interest, Providence will have to pay a total closer to $220 million, Rittereiser said.

In a statement shared with MedCity News, a Providence spokesperson wrote that the health system values its employees and “remains committed to providing them comprehensive, competitive pay and benefits, and to making sure they are correctly compensated for time worked.”

The spokesperson also wrote that Providence disagrees with the plaintiffs’ claims that some Providence hospitals in Washington failed to provide appropriate compensation to workers.

“This case presented several new and complex wage and hour issues that are not addressed in Washington statutes or by the Washington Courts of Appeal. Along with other employers also seeking clarity on these Washington wage and hour issues, we intend to appeal this result,” the spokesperson’s statement read.

Photo: zimmytws, Getty Images