When a home healthcare agency employs healthcare aides to
work in client homes, is it exempt from paying overtime as it would be under
federal law, or is overtime due under the stricter state regulations? The
Pennsylvania Supreme Court recently reviewed a case raising that issue. Its
decision illustrates some of the principles behind the Pennsylvania Minimum
What happened. Bayada
Nurses, Inc. offers nursing, personal care, rehabilitation, and therapy
services for clients. The company’s home healthcare aides are hired to provide
companionship and help Bayada’s clients in performing daily living activities.
The home healthcare aides are paid by the hour, but do not receive overtime.
The Pennsylvania Department of Labor & Industry informed Bayada that it would be auditing
the company’s payroll records based on information that “discrepancies may
exist” regarding Bayada’s compliance with the Pennsylvania Minimum Wage Act.
Under state and federal law, home healthcare aides are exempt
from overtime requirements. Under state regulations, this exemption is not
extended to aides working through a home healthcare agency. It applies only to
aides working directly for their employers. Bayada claimed that the
Pennsylvania Minimum Wage Act did not make this distinction, only the
regulations made this distinction, and therefore the Act should be interpreted
similarly to the federal Fair Labor Standards Act, which allows home healthcare
agencies to use the overtime exemption for its aides.
The Department argued that the regulation is reasonable and
protects individuals from unfair wages. The Department claims that because the
state regulation is more beneficial to employees than federal law, state law is
not preempted by federal law in this case.
What the court said. The Pennsylvania Supreme Court agreed with the Department, finding
“Pennsylvania’s domestic services exemption to be materially distinct from the
federal exemption, and find[ing] the Commonwealth’s more narrow exemption,
which is more beneficial to our Commonwealth’s employees, to be a permissible
exercise of state regulation.” Therefore, Bayada is not exempt from the
overtime requirements of the Pennsylvania Minimum Wage Act. Bayada Nurses,
Inc. v. Pa. Department of Labor & Industry, No. 67 MAP 2008
Point to remember: In
its spring 2010 regulatory agenda, the federal Department of Labor stated that
it intended to “consider whether the current exemption of companions working
for a party other than the family or household using the companionship services
is consistent with the status of a companion in light of significant changes in
the home care industry.” So keep a look-out because things may change.