Individuals, Families, and Households and those who Jointly Employ Home Care Workers with them are all Liable for Unpaid Overtime

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

DOL’s Final Rule Upheld by D.C. Court of Appeals

BREAKING NEWS: The D.C. Court of Appeals ruled today that the US Department of Labor’s (“DOL”) Final Rule on the Application of the Fair Labor Standards Act to Domestic Service (the “Final Rule”) is valid, because it is “grounded in a reasonable interpretation of the statute (FLSA) and is neither arbitrary nor capricious.” Under the Final Rule, home care agency workers are no longer covered by the FLSA’s companionship services exemption or its live-in domestic worker exemption. This decision is of serious concern to the home care industry. Whether the decision will be appealed to the U.S. Supreme Court remains to be seen.

What Questions Do Home Care Agencies Need To Have Answered?

  1. When will the change in the law be considered effective? The Final Rule was initially to be effective January 1, 2015, before it was invalidated by the district court. The D.C. Court of Appeals has reversed the district court, and remanded for entry of summary judgment in favor of the DOL. How will the District Court’s earlier decisions, or a delay in issuing its decision on remand, delay the effective date? What position will the DOL take on the effective date?
  2. When will the DOL begin to enforce the Final Rule? When the Final Rule was originally issued, the DOL said it would delay enforcement for six months from the effective date or until June 30, 2015, and for the remainder of 2015, would exercise prosecutorial discretion in determining whether to bring enforcement actions. Will the DOL still provide for a meaningful transition period?
  3. How does validation of the Final Rule affect private attorney lawsuits and class actions? Agencies are now obligated to pay time and one half the worker’s regular rate of pay for hours worked over 40 in a workweek. If a worker receives a base rate and a higher rate for certain hours (e.g. weekend), calculation of a worker’s overtime rate will be more difficult because it requires a weighted blending of the two rates to provide the regular rate of pay for that week. Employers who do not comply may be targeted by plaintiff’s lawyers.
  4. How does validation of the Final Rule affect enforcement actions by the NYS Department of Labor? The Final Rule effectively eliminates the differing treatment of workers under New York law based on whether they are employed by agencies or directly by households. Formerly, under the NYS Domestic Workers Bill of Rights, for- profit agency home care workers who qualified as “companions” under federal law only had to be paid overtime at one and one half the NYS minimum rate of pay. Now all agencies, for-profit and not-for-profit, must pay home care workers overtime at one and one-half times the individual worker’s regular rate of pay.
  5. What effect does the Final Rule have on the “hours worked” rules applicable to the home care industry? Is there a difference in the treatment of “live-in” workers versus “sleep-in” workers? What type of written agreements with 24 hour case workers must be entered into? Is it a “duty-free” hour if the worker is required to remain on-call on the premises? How must sleep time and travel time be handled?

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 the author, Stephen Zweig, Partner in FordHarrison’s New York City office, who has counseled and defended home care agencies for over 35 years, at szweig@fordharrison.com or (212) 453-5900, or the FordHarrison attorney with whom you usually work.

Brooklyn Judge Finds 13 Hours Pay for 24 Hour Case Lawful, Creating Split Among Kings County Justices

Executive Summary:

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.

Background:

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.

Decision:

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.

Conclusion

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 dmoss@fordharrison.com or Stephen Zweig at szweig@fordharrison.com of FordHarrison’s New York City office.

Federal Judge Vacates USDOL’s New Definition of Companionship Services Under Final Rule

Written by Stephen E. Zweig.

1/14/2015

This afternoon Judge Richard Leon of the U.S. District Court, District of Columbia, issued a decision vacating the U.S. Department of Labor’s Final Rule on Domestic Service Employees. He reasoned that: the DOL exceeded its authority by promulgating a rule that essentially defined the “companionship services” exemption out of existence as applied to the vast majority of home care employers and, by so doing, contravening Congress’ intent with regard to the exemption. Judge Leon’s decision concluded “the Department is trying to do through regulation what must be done through legislation.”

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