Judge Shuts Down Class Action in Home Health Overtime Suit

Recent changes in federal overtime laws that impact home health care workers and other domestic workers have led to a boom in collective action lawsuits throughout the industry. However, home care workers in New York won’t be able to to sue for overtime pay through a class action lawsuit, a recent judge in the state ruled.

The case, Cowell v. Utopia Home Care, Inc., involved up to 5,000 home health aides and personal care attendants who were seeking collective action status for unpaid overtime over a three-year period across six states. With multiple changes happening at the federal and state level, home health care has quickly become a top target for lawsuits involving labor and wage issues in the past few years.

The plaintiff sought overtime for work she claimed fell outside of the companionship exemption—the old labor rules that dictated whether home health care workers were entitled to overtime and minimum wage protections, or not. While that dispute continues, a New York magistrate judge ruled that the case could not be opened up to other home health care workers to recover damages for similar reasons. Utopia Home Care is headquartered in New York and provides home care services in six states.

The judge ruled this way because the complexities of the old rules and exemptions did not apply flatly to each potential new plaintiff—up to 5,000 of them—according to Phillip Davidoff, a new York-based attorney with law firm Ford Harrison, which defended Utopia.

“There were not common factual questions and answer in this case,” Davidoff told Home Health Care News. “A court would have to go through each plaintiff individually and determine through a ‘mini trial’ of each person to see if they met that exemption work rule unrelated to the care of a patient. …The judge ruled this is an appropriate case for collective action.”

The case largely reflects the lingering effects of confusing overtime and wage rules within the home health industry. Since the Department of Labor (DOL) ruled that all home care workers are eligible for overtime and minimum wage protections, disputes over exemption rules could become far and few between in the future, according to Davidoff.

“It will clarify these legal issues for home health agencies, for sure,” Davidoff said. “On a go-forward basis, now in New York and nationwide, home health workers are entitled to overtime. That issue won’t be hotly litigated in the future.”

However, for the next few years, until the statute of limitations run out, home health care workers could still seek backpay for overtime or other wage-related issues.

Class Action Protections

For home health agencies with hundreds of employees, the threat of a class action lawsuit can be severe. Fortunately, there are a few things that companies can do to better protect themselves from the possibility of being faced with such a lawsuit.

As evidenced with the New York ruling, having clear policies in place is perhaps the most essential step in defeating this threat. Written work procedures, policies and practices must be fact-based for home care staff, and analysis of factors that differ from worker to worker must be conducted depending on their patient’s needs and condition. For example, companies need to ensure their policies are clearly stated and compliant for workers who provide care for longer shifts.

“For the old rules and things that have happened already, there’s nothing agencies can do,” Davidoff said. “In general, agencies can tighten up their policies and procedures. For example, they need to ensure that time worked is properly recorded, and written agreements can be helpful.”

Of course, to avoid being sued for wage issues, home health businesses need to ensure they are in full compliance with FLSA overtime and hours worked rules and pay individuals properly for their work. This includes meeting minimum wage requirements, correcting tracking intra-day travel time, on-call time and training.

Written by Amy Baxter