Executive Summary: Under the U.S. Department of Labor's Final Rule on Domestic Service, ("DOL Final Rule") effective January 1, 2015, home care agencies can no longer claim the companionship exemption. As a result, managed care companies may be required to pay more than the 13 or 14 hours of reimbursement currently being provided for 24-hour cases and may be required to pay overtime, at one and one half the worker's regular pay rate for the workweek. You can lessen additional hours worked and overtime exposure by following the six-point defense strategy outlined below.
Who is a Sleep-In Worker?
Under the DOL's Final Rule, a "Sleep-In" worker is one who is required to be on duty for 24 hours or more. This worker differs from a "Live-In" domestic services employee who (i) provides services in a private home, and (ii) resides on the employer's premises on a "permanent basis" (works and sleeps at the employer's premises and has no home of his or her own), or for "extended periods of time" (works and sleeps at the employer' premises for five days a week (120 hours or more) or resides there for five consecutive nights or days at a time. Under the NYS Department of Labor's interpretation of New York law, a "Sleep-In" worker is one who works a 24-hour shift. This worker differs from a "Residential Employee" who lives on the premises of the employer and does not have his or her own home.
What Are "Hours Worked" By a Sleep-In Worker?
Under the DOL's Final Rule, hours worked by a Sleep-In worker who does not reside on the employer's premises on a permanent basis or for extended periods of time may exclude a sleeping period of no more than 8 hours provided that (i) adequate sleeping facilities are furnished to the worker and (ii) the worker receives at least five hours of uninterrupted sleep time. Hours worked also may exclude meal periods, provided the worker is relieved from duty, free to leave the premises, and free to use the time effectively for his or her own purposes. By comparison, the NYS Minimum Wage Order for Miscellaneous Industries and Occupations, ("Wage Order") does not refer to hours worked by a Sleep-In worker who does not reside on the employer's premises. A 2010 NYS DOL Opinion Letter fills this gap, stating that the same "hours worked" tests apply for both Residential and non-Residential Employees adopting the U.S. DOL's conditions, as stated above. However, the court in Andryeyeva v. New York Health Care recently rejected these conditions, holding that the Wage Order requires an agency to pay the minimum wage for each hour a 24-hour worker must be available at the client, regardless of whether sleep time and duty-free meal times are provided. This decision is currently being appealed.
Regardless of nomenclature, entering into a written agreement with the worker is advisable to document the intent of the parties. Though an agency cannot terminate a worker for refusing to sign a written Sleep-In Agreement or withdrawing consent to work under the agreement's conditions, the agency may decide not to continue to assign the worker to a 24-hour case.
How Much Must an Agency Pay a Sleep-In Worker for Hours Worked?
Under both federal and state law, an agency must pay a Sleep-In worker at least the minimum wage for all hours worked. The NYS minimum wage is currently higher than the federal minimum wage and increases to $8.75 per hour effective December 31, 2014. Moreover, the NYS Wage Parity Act requires a minimum of $10.00 per hour when a worker provides service on an "episode of care" to a Medicaid funded case. Overtime at time and one-half the worker's regular rate of pay must also be paid for all hours worked over 40 in a workweek, unless the worker qualifies as a Residential Employee under New York law, when overtime must be paid for all hours worked over 44 in a workweek.
How Does an Agency Defend Against a Private Lawsuit Targeting Sleep-In Workers?
First Line of Defense: The agency requires each Sleep-In worker to sign a Sleep-In Agreement for each assigned 24-hour case and keeps copies of the agreements for at least ten years. The agreement incorporates a Code of Conduct, which the worker also signs.
Second Line of Defense: The agency implements time and attendance policies, procedures and practices, and gives ample notice and opportunity to workers to allow timely compliance. The agency explains the rules and requires worker sign-off at initial orientation and annually at in-service training, acknowledging they have read and understand the rules. The agency also requires sign-off from the client and family acknowledging the restrictions on unauthorized hours and overtime work.
Third Line of Defense: The agency records all scheduled hours worked and requires contemporaneous recording by the worker, whether by telephonic, electronic or paper transmissions of all actual hours worked, including any interruptions in sleep time, meal time, or other duty-free time.
Fourth Line of Defense: The agency reports all time worked to its payroll administrator, including overtime at the employee's regular hourly rate for the workweek, and requires each employee to immediately report, in writing, any underpayments based on additional time purportedly worked.
Fifth Line of Defense: The agency monitors workers by random visits and by telephone to the worker, client and household to determine any change in the client's condition that may require reassessment of the client as a 24-hour case and any claims by the worker of additional time worked.
Sixth Line of Defense: The agency disciplines workers, consistently and uniformly, for failing to report additional time worked contemporaneous with its occurrence, for accepting work from the client outside of regularly scheduled hours, or for falsifying timesheets.
