Valley Children’s boasts $1.68bil in assets. Lawsuit alleges it paid nurses sub-minimum wage.

A class action suit filed on behalf of nonexempt nurses at Valley Children’s alleges the hospital paid on-call nurses below minimum wage as it boasts record profits and sky-high executive compensation.

As it continues to face criticism for sky-high pay for its executives, Valley Children’s Healthcare is facing a fresh lawsuit alleging it paid below minimum wage for mandatory on-call shifts. 

According to the lawsuit, Valley Children’s has historically paid between $6 to $8 per hour for on-call shifts. Minimum wage in California has been over $8 per hour for the last decade. 

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The big picture: The lawsuit was filed on behalf of Bonnie Ferreria, a nurse who has worked at Valley Children’s as a non-exempt employee for more than four years. 

  • Ferreria is suing Valley Children’s to receive all minimum and overtime wages due to her. 
  • The lawsuit claims that the aggregate claim owed to affected employees is nearly $5 million. 

Zoom in: The class action lawsuit claims Valley Children’s failed to accurately compensate Ferreria and other employees for missed meal and break periods, all time worked, on-call work and at the correct regular rate of pay. 

  • Valley Children’s also allegedly failed to issue accurate itemized wage statements showing all applicable hourly rates in effect during pay periods and the corresponding amount of time worked at each hourly rate. 
  • Those practices are in place to purposefully avoid paying employees the accurate and full payment for all time worked, the lawsuit claims, meaning Valley Children’s has been able to illegally profit and gain an unfair advantage to other healthcare entities who comply with the law. 

Go deeper: According to the lawsuit, Valley Children’s paid between $6 an hour to $8 an hour when an employee was on-call but not called back to physically work at the hospital. 

  • “When the employee was called back to work at the hospital, and returned to the hospital, a different rate would apply, but the employee, would at times, forfeit the less-than-minimum wage on-call pay,” the lawsuit reads. That resulted in employees earning less than minimum wage for mandatory on-call shifts. 
  • While state law requires that employees are paid overtime at 1.5 times their regular rate of pay, the lawsuit claims that Valley Children’s has paid employees at an hourly rate plus incentive pay that was tied to specific elements of an employee’s performance. 

By the numbers: While Valley Children’s has allegedly failed to pay minimum wage for on-call employees, the hospital has been under the microscope for posting record profits and higher-than-average payouts for executives.

  • According to the hospital’s 2019 tax return – which was for the fiscal year ending in September 2020 – Valley Children’s boasted $1.3 billion in net assets. 
  • Net assets rose to $1.47 billion in its tax year 2021 returns, and in 2022 tax returns reported net assets of $1.68 billion. 
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