Providence to pay $200M for illegal timekeeping and break practices

Providence Health & Services must pay more than 33,000 hourly employees a total of more than $200 million after a King County judge found evidence the hospital system had willfully been shortchanging staffers for years through illegal timekeeping and meal break practices.

The class-action complaint, first filed in 2021 on behalf of Providence nurses, technicians, medical assistants and other hourly staffers, alleged the hospital system is responsible for wage violations involving its former “rounding” policy and meal break practices. The trial, which spanned eight days, concluded this week after a Seattle jury reached a verdict Thursday.

Damages for unpaid wages initially totaled about $98 million, but because King County Superior Court Judge Averil Rothrock determined in January that Providence’s violations were willful, state law requires the total to be doubled. This means staffers will ultimately receive about $220 million, including statutory interest.

“It’s an enormous verdict,” attorney Jason Rittereiser, who represented hospital employees, said Friday. “It sends a message to health care corporations, not just in Washington but across the country, that if you withhold wages from your employees, our system of justice is ultimately going to hold you accountable.”

In total, analyses show that staffers worked more than 234,000 unpaid hours over the course of nearly five years, Rittereiser said.

Providence said in a statement it disagrees with the claims that it failed to provide appropriate compensation to staffers and that it’s “disappointed” with the outcome of the case. 

“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,” the statement said. “Along with other employers also seeking clarity on these Washington wage and hour issues, we intend to appeal this result.”

Providence declined to comment further, but noted it “remains committed to providing [employees and caregivers] comprehensive, competitive pay and benefits, and to making sure they are correctly compensated for time worked.”

According to the complaint, Providence used to pay its hourly staffers based on time worked rounded to the nearest 15-minute increment — per a policy the hospital system discontinued in October — even though employees use an electronic timekeeping system to punch in the starts and ends of their shifts that can track hours worked “down to the second,” Rittereiser said.

For example, he said, if a staffer were to clock in at 6:53 a.m. for a 7 a.m. shift, the timekeeping system would report their start time as 7 a.m. and pay them accordingly. If they clocked out after their scheduled end time, the system could also round them back to the nearest 15-minute increment.

The complaint acknowledged the system could theoretically round time worked in favor of the employee — for example, where a staffer clocks in up to 7 minutes after their scheduled start time or before their scheduled end time — but argued the “overall effect of the rounding policy, when applied in conjunction with other Providence policies and practices, is to deny hourly employees pay for all compensable hours.”

In partial summary judgment, Rothrock agreed the system was “not neutral” and “systematically favors Providence,” resulting in underpaying of class members.

The complaint also argued Providence failed to give enough meal breaks to staffers who worked more than 10-hour shifts. State law requires employers provide two 30-minute meal periods when they work more than 10 hours straight, but Providence has a “decadeslong system set up” that regularly denies an extra break in those situations, Rittereiser said.

Because meal breaks are automatically deducted from employees’ pay at Providence, the jury awarded $90.3 million to staffers for unpaid and missed second meal breaks. Damages for uncompensated hours worked due to rounding total about $9.3 million. Because the jury ruled some class members knowingly agreed to waive their second meal breaks, about $1.3 million in those unpaid wages was deducted from total damages. 

The class includes all hourly Providence employees whose pay was impacted by these practices between September 2018 and May 2023, including lead plaintiffs Naomi Bennett and Janet Hughes, who used to work at Providence Regional Medical Center Everett and Providence St. Peter Hospital in Olympia, respectively.

Individual awards vary widely depending on how much unpaid work each employee should have been paid for, from a couple of hundred to thousands of dollars, Rittereiser said.

“Providence has vowed to continue to fight this,” he said. “At some point, they’re going to have to come to the reality they need to take accountability.”