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Bayada Nurses, Inc. v. Pennsylvania

Fair Compensation for Home Health Care Workers in Pennsylvania

The Pennsylvania Supreme Court agreed that the state's fair pay law covers home health care workers employed by employment agencies, a ruling AARP had urged in its "friend of the court" brief, and thus the agencies must pay overtime to its workers.

Background


Bayada Nurses employs registered and licensed practical nurses and home health aides to work in Bayada's clients' homes. The Pennsylvania Department of Labor and Industry began an investigation of Bayada on suspicion that it does not pay minimum wage or overtime to its Home Health Aides (HHAs).

Bayada sued the state, arguing that the state exceeded its authority by initiating the investigation. It based its argument on two grounds: (1) a decision in 2007 by the U.S. Supreme Court that ruled that HHAs were not subject to federal overtime laws, and (2) that it is not the sole employer of these workers. Bayada argued that HHAs are jointly employed by both Bayada and its clients and therefore the workers fall into an exception in state overtime law for people providing "domestic services in or about the private home of the employer."

The Litigation


AARP Foundation Litigation attorneys filed AARP's "friend of the court" brief with Pennsylvania AFL-CIO and the Service Employees International Union in Bayada Nurses, Inc. v. Pennsylvania in the state's highest court. As to Bayada's first point, it is true that in its Coke v. Long Island Care at Home decision, 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.

However, the dispute in Bayada centered not on federal law but on Pennsylvania's own state labor law. AARP's brief pointed out that Pennsylvania law does not contain an exemption for companionship services. States are undeniably permitted to enact more inclusive wage and hour standards than federal law. In fact, the brief noted, many states have chosen not to exempt home health care workers or live-in companions from state wage law and there is no reason to overturn Pennsylvania's law.

As to the issue of exemption for people providing domestic services in the home, AARP pointed out that these workers are clearly defined in state law as those who "work in or about a private dwelling for an employer in his capacity as a householder" (emphasis added) — notably not mentioned are services provided to an individual for reasons (i.e., health or personal care) that have nothing to do with his/her status as a householder.

The trial court had earlier held that Bayada's HHAs were not exempt from state labor laws by virtue of Pennsylvania's domestic service exemption. Similarly, the court rejected Bayada's assertion that the Supreme Court ruling set the matter of coverage at rest. Indeed, the court noted, that ruling supported deference to agency interpretations and here the agency ruled that the definition of exempt worker did not include HHAs employed by companies rather than directly by family members.

The Pennsylvania Supreme Court upheld that decision. Citing AARP's brief, the court ruled 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. The court also rejected Bayada's claim that its workers were jointly employed by Bayada and its customers (and therefore, Bayada argued, the employees fell under the "householder" exception). The court dismissed Bayada's case.


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