Pennsylvania Supreme Court Finds Agency Home Health Care Workers Eligible for Overtime Pay

Posted on April 29, 2011

Pennsylvania’s Minimum Wage law requires that employees who work in excess of 40 hours in a workweek be paid overtime at the rate of 1½ times the worker’s regular rate of pay. However, the law exempts “[d]omestic services in or about the private home of the employer” from the minimum wage and overtime requirements. In particular, the Minimum Wage Act exempts the services of aides who are hired directly by the householder; it does not exempt the services of aides who work for a third party employment agency. For that reason, the Pennsylvania Supreme Court in Bayada Nurses, Inc v. Department of Labor and Industry, 2010 Pa. LEXIS 2585 (November 17, 2010), held that a home health agency cannot rely on the “domestic services” exemption to avoid paying overtime to its Home Health Aides (HHAs).

Bayada Nurses, Inc. is an employment agency offering a range of home care services. It employs numerous registered and licensed practical nurses and home health aides to work in clients’ homes. Bayada’s clients are billed for each hour of service provided by an aide, but are not charged for overtime. Consequently, no Bayada HHA receives overtime pay.

In 2010, the Pennsylvania Department of Labor and Industry began investigating Bayada on suspicion that it was not paying its HHAs minimum wage or overtime. Following the investigation, Bayada initiated a declaratory judgment action seeking to establish that it was entitled to claim the domestic services exemption because the agency and the householder jointly employ the aides. In the alternative, Bayada asked the Court to apply the overtime pay rules of the federal government’s Fair Labor Standards Act, which exempts HHAs from overtime. Bayada based that argument on the 2007 decision in Coke v. Long Island Care at Home, a decision in which the U.S. Supreme Court ruled that the Department of Labor had the authority to exempt home care workers employed by employment agencies from federal overtime laws.

The principal dispute in Bayada, however, centered on Pennsylvania’s own state labor law and not the federal law. Acknowledging the difference between federal and state law, Justice Debra Todd wrote, “the federal statute establishes only a national floor under which wage protections cannot drop, but more generous protections provided by a state are not precluded.” Thus, “Pennsylvania may enact and impose more generous overtime provisions than those contained under the FLSAwhich are more beneficial to employees.” In other words, the Pennsylvania Supreme Court held that Pennsylvania’s domestic services exemption was “materially distinct” from the federal exemption and that the more narrow exception was a permissible exercise of state regulation. For those reasons, the Court unanimously rejected both of Bayada’s arguments.

The Bayada decision means that Pennsylvania home health agencies and related employers must now pay overtime to home aides who work more than 40 hours in a workweek. Moreover, to claim the benefit of the Pennsylvania domestic services exemption, the worker must be providing domestic services in or about the private home of the employer (i.e. the person receiving the services and assistance).

Article written by Joseph V. Balestrino.

Labor & Employment Department Attorneys 

Legal Advice Disclaimer The content of this website is provided for general information purposes only. It should not be used as a substitute for consulting an attorney for legal advice regarding the reader's own affairs. Knox McLaughlin Gornall & Sennett, P.C. is not responsible for the content provided on any third-party website which may be accessed via links provided by this site.