Maxim Healthcare Services Off the Hook in Overtime Case

Home health aides in Colorado who work in private residences are not entitled to overtime pay under state law, a U.S. appeals court ruled Wednesday.

The ruling comes from the 10th U.S. Circuit Court of Appeals, which was reviewing a legal against against Maxim Healthcare Services Inc., a privately held medical staffing company based in Columbia, Maryland. As part of its business mix, Maxim offers both home health and behavioral health services, in addition to health care staffing and personal care services.

The for-profit Maxim is also one of the largest pediatric home health providers in the nation.

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In its ruling, a three-judge panel overturned a $2.7 million judgement against Maxim. The judgement stemmed from a 2015 case spearheaded by a class of aides who claimed the company unlawfully withheld overtime pay they had earned.

Under Colorado law, employers generally must pay all employees time-and-a-half wages for overtime hours. State law, however, also carves out several express exemptions that potentially bypass that requirement.

For example, Colorado employers do not need to pay overtime wages to “companions, casual babysitters and domestic employees employed by households or family members to perform duties in private residences.” The overtime case against Maxim argued that third-party home health aides from staffing companies did not fall under the exemption category.

A U.S. district court judge sided with the class of aides — led by Theresa Jordan — in 2018. Specifically, the judge cited the law’s “plain language,” which called out how the exemption applied only to companions who were employed by households or family members — not employers such as Maxim.

But the 10th U.S. Circuit Court of Appeals changed course on Wednesday.

“The question before us is whether ‘companions’ working for third-party employers — rather than for households or family members — fall within the companionship exemption,” U.S. Circuit Judge Jerome A. Holmes wrote in the panel’s decision. “We hold that they do.”

To come up with its ruling, the court partly leaned on the Oxford English Dictionary, the American Heritage Dictionary of the English Language, Black’s Law Dictionary and the Merriam-Webster Online Dictionary, weighing what the terms “companion,” “casual babysitter” and “domestic employee” truly mean.

“In view of [the law’s language] ambiguity, we must take a deeper dive into the meaning of the terms ‘companions,’ ‘casual babysitters’ and ‘domestic employees,’” Holmes wrote. “And this inquiry hints that the companionship exemption applies to all companions.”

The Colorado overtime case is an early chapter in what is likely to be a busy 2020 on the home health and home care legal fronts.

Overtime is especially likely to remain a hot topic, as an increasing number of states are exploring domestic workers’ bill of rights provisions. 

“The reason why agencies care about [domestic workers’ bill of rights] is because it adds burden and additional requirements,” Angelo Spinola, an attorney and shareholder at San Francisco-based Littler Mendelson, previously told HHCN. “In many cases, agencies don’t know that these laws have been passed. So what happens, for example, if the law requires the employer to provide a notice, training, or other benefits to the caregiver and the agency is unaware of it, then the agency is now liable for violations from a law it didn’t even know about. That’s easy pickings.”

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