Two healthcare staffing firms must collectively pay $2.4 million in back wages and damages after not paying overtime, according to court documents. The lawsuit was brought by acting Secretary of Labor Julie A. Su.

Gate Solution Systems, based in Malden, Massachusetts, is a healthcare staffing firm providing workers for cleaning, laundry and dietary assistance services, according to court documents. The company misclassified workers as independent contractors from March 19, 2022, through Feb. 17, 2023, court documents say. Workers were not paid overtime; instead, they were paid straight time for their hours worked.

Gate Solution Systems sent workers to facilities in New Hampshire, Vermont, Maine and Massachusetts.

“Misclassification of employees as independent contractors remains a serious concern for the Department of Labor,” Wage and Hour Administrator Jessica Looman said in a press release.

The lawsuit also named Gate’s principal and owner, Maria do Carmo Araujo, as a defendant. Other defendants included Antonio Brasil Filho and Lucelia da Silva, both managers at Gate Solution Systems.

An affiliated firm, Healthcare Services Group of Bensalem, Pennsylvania, was also named in the lawsuit. The Department of Justice reported that Gate Solution Systems hired the employees, who operated under the supervision of Healthcare Services Group.

The department reported 341 employees were denied overtime.

Gate Solution Systems owes $717,788.05 in back wages and interest as well as $717,788.05 in liquidated damages plus interest. Healthcare Services Group owes $495,000 in back wages and $495,000 in liquidated damages. The amounts total $2.4 million.

Attorneys for the defendants have been contacted for comment.

Su v. Gate Solution Systems et al; US District Court for the District of Massachusetts; 1:24-cv-12803