Executive Summary: Claims by home care workers for unpaid overtime have risen steadily since the U.S. Department of Labor, in 2015, eliminated the federal overtime exemptions that allowed agency employers essentially to pay no overtime wage premiums. This has greatly affected agency employers In New York, who are increasingly seeing class action suits being filed against them. It has also affected individuals, families and households in New York who hire home care workers directly, especially when the home care worker is an agency-employer worker who is continued for extra hours in a workweek. Since 2010, the New York Domestic Workers Bill of Rights has required “direct-hire” employers of home care workers to pay overtime at time and one half the worker’s regular rate. When an agency worker is continued for extra hours by an individual, family or household, both can be held liable for unpaid overtime on all hours worked over 40 in a workweek, regardless of who scheduled the hours. Beyond the agency and individual, family, or household, others who have the power, whether or not exercised, to hire, employ, or pay the worker, such as a child or relative who takes care of a client’s affairs or an attorney acting under a power of attorney or as a legal guardian, conservator, or trustee, are also at risk of being held liable. Continue reading “Individuals, Families, and Households and those who Jointly Employ Home Care Workers with them are all Liable for Unpaid Overtime”
Executive Summary: On November 2, 2015, the NYS Department of Health (“DOH”) issued important notices affecting the wage and overtime obligations of New York City and Nassau, Suffolk, and Westchester County home care agencies. In addition to setting Total Compensation under the Wage Parity Act for March 1, 2016 – February 28, 2017, the DOH reversed its existing position that overtime pay does not reduce the additional and supplemental wage package due on each episode of care hour worked under the Wage Parity Act. This reversal of position has major ramifications for the home care industry in downstate New York.
What was the DOH’s position on overtime? Until issuance of Dear Administrator Letters (“DALs”) titled “Official Notice of Home Care Worker Wage Parity Minimum Rate of Total Compensation,” on November 2, 2015, the DOH had said that, “(o)vertime was not included in the Total Compensation rate of $14.09″ under the Wage Parity Act.” (FAQ No. 7, Home Care Worker Wage Parity FAQs May 2014). Under that interpretation, an agency servicing a WPA covered case in New York City was obligated to pay overtime wages for all hours over 40 in a workweek PLUS an additional wage and benefit package of $4.09 (the “$4.09 Package”). On and after the effective date of the U.S. Department of Labor’s “Final Rule,” October 13, 2015, this meant that an overtime episode-of-care hour under the WPA had a labor cost of $15 in wages and $4.09 Package, for a total cost of $19.09.
What is the DOH’s new position on overtime? Each of the Notices issued by the DOH on November 2, 2015, one for New York City and one for Nassau, Suffolk, and Westchester County home care agencies, expressly state that “FAQ number 7 is superseded by this notice.” The Notices state further:
The Overtime premium pay (1/2 times the workers “regular rate of pay”) that employers are required to pay for overtime hours under state and federal minimum wage laws may be used to satisfy the Total Compensation required under the wage parity law. (emphasis added)
This means, says the DOH, that “if the Total compensation rate is $14.09, then the requirement to pay or prove $14.09 is fully satisfied by payment of $15, for that same hour of overtime.” No longer must an agency servicing a WPA case in New York City pay the $4.09 Package on top of $15.00 for an overtime hour.
What questions does this raise for home care agencies?
- If the actual cost to an agency for a WPA covered overtime hour as compared to a non-overtime hour has effectively been reduced to $15 per hour, instead of $19.09 per hour, will this reduction in the overtime premium to $.91 be given more weight in deciding whether to provide a worker with overtime hours in order to retain that worker and worker’s client and greater priority to “continuity of care” concerns?
- If the DOH’s “Notice Regarding Overtime Pay under Wage Parity,” is, as written, “provided to clarify the extent to which overtime can be used to satisfy the Total Compensation requirements for a given hour of overtime” is this clarification effective retroactively?
- If a home care agency has already paid WPA covered overtime hours at $19.09 per hour, is there any recourse or future reduction in WPA $4.09 Package obligations available to that agency?
If you have any questions regarding this Alert or would like our advice of your home care agency’s particular facts and circumstances, please contact our Home Care Group members, Stephen Zweig, Philip Davidoff or Eric Su in FordHarrison’s New York City office at (212) 453-5900, or the FordHarrison attorney with whom you usually work.
On May 4, 2015, Kings County Supreme Court Justice David I. Schmidt issued a decision in Adriana Moreno, et al. v. Future Care Health Services, Inc., et al., Index No. 500569/13, which concerned live-in home health aides (“live-ins”) who asserted they were not properly compensated for 24-hour shifts. Justice Schmidt decided that the plaintiffs did not meet the requirements as set forth under New York law for class certification to apply to all similar workers, and further deferred to the New York State Department of Labor’s (“NYDOL”) 2010 Opinion Letter (“2010 Opinion”), disagreeing with the live-ins, and upholding the homecare agency’s payment of the minimum 13 hours for 24-hour shifts.
The NYDOL 2010 Opinion considered the issue of live-in compensation for third-party agency employers, stating such employers were permitted to pay live-ins for 13 hours for a 24-hour shift, provided the live-in: (a) slept 8 hours (with at least 5 of such hours uninterrupted); and (b) received 3 uninterrupted hours for meals. The 2010 Opinion can be viewed here: http://labor.ny.gov/legal/counsel/pdf/Other/RO-09-0169%20-%20Live-In%20Companions.pdf.
The affordability of employing live-ins has been a hot topic in the homecare industry, which ultimately turns on how a live-in’s “hours worked” are defined. For more information on how an agency can defend itself against a private lawsuit targeting live-ins, view our firm’s December 12, 2014 LegalAlert: “Can Your Home Care Agency Afford to Employ Sleep-Ins?” here: http://www.fordharrison.com/can-your-agency-afford-to-employ-sleep-ins-1.
Justice Schmidt relied on the framework outlined in the 2010 Opinion and found no “evidentiary detail” that demonstrated the live-ins in Moreno did not receive the necessary uninterrupted sleep or meal breaks to warrant more than the 13 hours’ pay they received. Moreover, Justice Schmidt noted the live-ins failed to show an “across the board policy” by their Employer which violated their right to compensation for all “hours worked.”
Justice Schmidt’s Moreno decision is welcome news for homecare agencies operating in Kings County and New York generally, as it signals a deviation from the harsh holding of fellow Kings County Supreme Court Justice Carolyn Demarest in Andreyeyeva v. New York Health Care, Inc., 45 Misc. 3d 820 (Sup. Ct., Kings County, Sept. 16, 2014). Just nine months ago, Justice Demarest’s Andreyeyeva decision sent shockwaves through the homecare industry, declaring that 24-hour shift workers should receive compensation for every single hour of their 24-hour shift, regardless of sleep or meal time. Judge Demarest’s decision is currently on appeal.
In December of 2014, Justice Schmidt had declined to grant a motion to dismiss in Melamed v. Americare Certified Special Serv., Inc., 2014 N.Y. Slip. Op. 33296 (Sup. Ct., Kings County, Dec. 11, 2014) and cited Andreyeyeva in support of his decision. In that case, Justice Schmidt declined to decide the issue of how many hours of pay was required on a 24-hour shift, stating that “any argument over whether or not the plaintiffs should be paid for every hour on site is irrelevant at this point since a grant of dismissal, in defendants’ favor, is not hinged upon such issue.” Id.
The disagreement between Supreme Court Justices in Kings County evidences how complicated the issue of compensable time is with regards to 24-hour shift workers. Although New York Labor Law (“NYLL”) requires that employees receive pay for “each hour worked,” reasonable minds (i.e. two Supreme Court Justices) now “split” and differ on what “hours worked” means in this context. If you have any questions regarding this Alert, please contact Danielle Moss at firstname.lastname@example.org or Stephen Zweig at email@example.com of FordHarrison’s New York City office.