Union Agreement to Arbitrate “Sleep-In” Wage and Hour Claims Applies Even Though Agreement Was Signed After Lawsuit Began

Executive Summary: In Lai Chan et al. v. Chinese-American Planning Council Home Attendant Program, Inc., decided February 3, 2016, the Southern District of New York (covering New York, Bronx, Westchester, Rockland, Putnam, Orange, Dutchess, and Sullivan counties) deferred to arbitration the unpaid wage and overtime claims of Sleep-in workers covered by a union agreement, even though the agreement to arbitrate was signed after the lawsuit alleging these claims against the home care agency was commenced. An earlier decision in this same case from the New York County Supreme Court had denied the agency’s motion to dismiss the complaint, and volunteered that under New York Labor Law, Sleep-in workers must receive wages for 24 hours of work. This question will now be decided in arbitration, not in a court action.

What Reason Did the Federal Court Give?

The question presented was whether unpaid wage and overtime claims of Sleep-in workers should be deferred to arbitration under a union collective bargaining agreement even though the agreement with the arbitration provision was signed after the claims were brought in court.

The plaintiffs claimed that the agreement to arbitrate, which was embodied in a 2015 Memorandum of Agreement between the agency and 1199 SEIU, could not apply retroactively to their claims. The court rejected this argument, stating that under controlling case law, unless the parties said otherwise in the agreement to arbitrate, “an arbitration provision may cover claims that accrued prior to the execution of the agreement to arbitrate.” Moreover, the court added that any question on the scope of the arbitrable issues was for the arbitrator to decide, not the court. Were it not for this court’s decision, the agency would have had to defend the workers’ claims as a class action in court.

Points to Consider:

  1. To have a court defer wage and hour (or other) claims, whether brought singly or as a class, to arbitration, you must have your home care workers sign bona fide arbitration agreements. These agreements should be written in a manner to be understood by home care workers, provide sufficient protection to allow workers to bring their claims in arbitration, and be entered into voluntarily by workers with safeguards against any claim of fraud or duress.
  2. Implementation of arbitration agreements in non-union settings and procedures to obtain worker signatures must be consistent, uniform, and designed to obtain informed consent, whether the agreement is requested from a new employee as a condition to hire or a current employee as a condition of continued employment.

 

What Questions Does This Decision Raise?

  1. How do you construct an enforceable arbitration agreement that meets all legal requirements?
  2.  What is the “best practice” to be used in asking home care workers to sign arbitration agreements?
  3.  Where an employer knows a class action lawsuit was filed against it, must it advise all workers, including new hires who are asked to sign arbitration agreements, of the lawsuit?
  4.  Will individual arbitration agreements with non-union workers, if implemented properly, apply retroactively to class actions the same as union agreements to arbitrate?
  5.  How would an agreement to arbitrate with a union affect an agency’s former workers from bringing an action in court, either as a class or singly?
  6.  What time limits for bringing wage and hour claims will apply to claims brought in arbitration?

FordHarrison’s Home Care Law Group is composed of partners and associates who are immersed in the home care industry and dedicated to solving its problems. The Group can provide you with an arbitration agreement and written implementation procedures. If you have any questions about this Legal Alert, please call the Group Head, Stephen Zweig, at 212-453-5906 or email him at szweig@fordharrison.com.

Home Care Professionals Series: Part 1 – NYS Domestic Worker’s Bill of Rights

Executive Summary. As most home care agencies know, the United States Department of Labor (“USDOL”) eliminated the companionship exemption for home care agency workers on October 13, 2015 in its Final Rule on the Application of the FLSA to Domestic Service Workers (“Final Rule”). What they may not have considered, however, is that following the Final Rule, the NYS Domestic Workers Bill of Rights, which originally only applied to home care workers directly employed by individual households, now also applies to agency employed home care workers. For NYC agencies, in particular, coming into compliance with Domestic Workers Bill of Rights requires changes to the benefits they provide to their home care workers.

Paid Leave Requirements

Until October 13, 2015, when the USDOL’s Final Rule went into effect, NYC home care agencies’ paid leave policies were only required to comply with the paid sick day requirements under Earned Sick Time Act (ESTA) (effective April 1, 2014, except for unionized agencies, which were exempted until their collective bargaining agreements expired). Now, NYC home care agencies have to comply with both ESTA and the NYS Domestic Workers Bill of Rights (“DWBR”).

DWBR requires that home care workers of eligible home care agencies be given 3 paid “days of rest” if they have been employed with the agency for at least one year and averaged 30 or more hours of work per week. Part-time workers receive fewer days, depending on their average hours worked.

ESTA separately requires that home care workers of eligible home care agencies be provided up to 40 hours of paid sick leave annually. Fortunately, ESTA has special provisions for workers covered by DWBR that effectively allow agencies to credit the paid time given under DWBR toward ESTA’s 40 hour requirement: under ESTA, home care agencies are only required to provide 2 days of sick leave to full-time home care workers (and, consistent with DWBR provisions, less time for part-time workers).

In sum, a NYC home care agency must offer its home care workers at least 5 days of paid time off (3 days of rest under DWBR and 2 sick days under ESTA) if they (i) are employed for at least one year; (ii) worked 30 or more hours per week, on average, during the previous year; and (iii) work more than 80 hours per calendar year in NYC.

Accrual and Use Requirements of Paid Leave

DWBR, unfortunately, is silent on accrual and use limitations home care agencies may impose. The New York State Department of Labor (“NYSDOL”) has issued FAQs advising agencies that paid days of rest are due to the worker at the beginning of the calendar year. For home care workers who have not yet been employed for a full year by the first day of the calendar year, the agency must transition the employee’s benefits by providing a pro rata share of days of rest on the one-year anniversary of employment and then providing the full allotment on the first day of the next calendar year. According to these FAQs, agencies cannot require that workers use days of rest in periods of less than one day, and any unused earned days of rest must be paid at the end of each year and at separation of employment. The NYSDOL FAQs also indicate that a “day” is to be paid at the worker’s regular rate of pay for the average number of hours in his or her normal workday.

ESTA, apparently trying to harmonize its requirements with those of DWBR, requires that additional sick time under ESTA be “calculated” in the same manner as days of rest under DWBR, but does not answer whether many of its other nuanced requirements will give way to the provisions under DWBR.

Weekly Day of Rest

DWBR also entitles home care workers to a 24-hour (consecutive) period “of rest” each week, which it recommends be coordinated with the worker’s traditional day for religious observance. If the home care worker waives this entitlement and accepts work on that day, he or she must be paid at the worker’s overtime rate for all hours worked on this day, whether or not the worker’s total hours for the week exceed 40.

 What questions does the new application of DWBR raise for NYC home care agencies?

  1. How many hours constitutes a “day” if your home care workers work shifts of varying lengths, including 24-hour shifts?
  2. Do home care agencies have to allow their workers to take sick time in 4-hour increments, when that is not required by DWBR?
  3. May a home care agency implement different notice or scheduling requirements for the use of days of rest under DWBR and sick days under ESTA?
  4. If a home care agency’s collective bargaining agreement has not yet expired, and therefore ESTA does not apply, how should the agency plan to implement current DWBR and future ESTA requirements?
  5. If a home care agency had not yet provided any paid days of rest or sick days to its home care workers for 2015, how much time is the agency required to provide retroactively to its workers for 2015?
  6. May a home care agency choose to rollover workers’ sick days rather than pay out at the end of the year, as allowed under ESTA, but not allowed for days of rest under the DWBR?
  7. If a home care agency is providing extra paid time off in addition to DWBR time, what are “best practices” and how should they be written in a paid time off provision in an employee handbook?

The Bottom Line

ESTA and DWBR combine to create a statutory minimum for paid time off available to home care workers. However, the interplay between the two laws is not yet well-defined and agencies should be careful to implement a paid time off policy that complies with the different requirements of both laws.

FordHarrison advises and counsels home care agencies on all labor, employment and benefit issues. If you have any questions regarding this Legal Alert or would like our advice about particular facts and circumstances at your home care agency, please contact the authors, Stephen Zweig, Roshni Chaudhari, or Andrea Orr (paralegal), members of the firm’s Home Care Industry Group in its New York City office at szweig@fordharrison.com, rchaudhari@fordharrison.com, aorr@fordharrison.com, or (212) 453-5900, or the FordHarrison attorney with whom you usually work.