🗞️ Clock Out, Pay Up: Federal Labor Investigators Recover $171K in Overtime Wages from Hawaii Rehab Clinics
The U.S. Department of Labor recovered $171,897 in back wages for 32 workers at a Hawaii rehabilitation clinic that failed to combine employee hours across its three locations, triggering overtime violations under federal law.
The U.S. Department of Labor has recovered $171,897 in back wages from a Honolulu-area physical therapy and rehabilitation company after federal investigators found that employees working across multiple clinic locations were not receiving overtime pay to which they were legally entitled.
The department's Wage and Hour Division determined that First Physical & Functional Rehab, which operates three Oahu clinics under the names Wahiawa Rehab Services Inc., Waianae Valley Physical Therapy Inc., and Waipahu Physical Therapy Inc., failed to aggregate hours worked across its facilities in Wahiawa, Waianae, and Waipahu when calculating weekly compensation. The Fair Labor Standards Act requires employers to combine all hours worked for the same employer, regardless of the number of locations involved, when determining whether an employee has crossed the 40-hour weekly threshold that triggers overtime pay at one and one-half times the regular rate.
The violations affected 32 employees. Because investigators determined the conduct was willful, the company was assessed an additional $18,810 in civil money penalties, bringing the total to approximately $190,700.
The case reflects a broader enforcement pattern in the healthcare sector. In fiscal year 2025, the Wage and Hour Division resolved 2,370 healthcare industry violations and recovered more than $53 million in back wages industrywide, according to federal data. Overtime infractions are the single largest driver of federal wage enforcement, accounting for nearly 80 percent of all FLSA back-wage cases nationally, according to the division's administrator.
The Wage and Hour Division pointed employers to compliance assistance resources, including the agency's Payroll Audit Independent Determination (PAID) program, which allows employers to self-report and resolve potential FLSA violations before a formal investigation is opened.
Key Points
- First Physical & Functional Rehab operates three Oahu clinics under separate corporate names in Wahiawa, Waianae, and Waipahu.
- The employer failed to combine hours across locations, causing 32 workers to be underpaid overtime required under the FLSA.
- The DOL's Wage and Hour Division recovered $171,897 in back wages.
- An additional $18,810 civil penalty was assessed due to the willful nature of the violations, for a combined total of approximately $190,700.
- The healthcare industry accounted for 2,370 violations and more than $53 million in recovered back wages in fiscal year 2025.
- Overtime violations account for nearly 80 percent of all FLSA back-wage cases nationally.
- Employers with multiple locations must aggregate all hours worked across sites when calculating weekly overtime obligations under federal law.
Primary Source Author: U.S. Department of Labor, Wage and Hour Division, Acting District Director Patrick Candoleta, Honolulu
Primary Source: U.S. Department of Labor Press Release, May 6, 2026
Primary Source Link: DOL Wage and Hour Division Release whd20260506
