The home care industry has faced collapse since a series of New York Appellate Division decisions invalidated New York Department of Labor (NY DOL) policy and held that home care attendants working 24-hour shifts who are employed by third-party agencies had to be paid for every hour of the shift and employers could not deduct sleep and meal periods. Although federal courts refused to follow the Appellate Division decisions, over 145 class action complaints have been filed on behalf of home care attendants seeking pay for the sleep and meal periods their employers deducted over the previous six years. The uncertainty on how to pay the attendants could only be resolved by the Court of Appeals. Now, that time has come. On March 7, 2018, the Second Department Appellate Division issued a decision certifying the question to the Court of Appeals, paving the way for final resolution of this matter in New York.

The Industry Standard

Home care attendants working live-in shifts have historically been paid for 13 hours of a 24-hour shift in accordance with well-established NY DOL guidance.Although the guidance dates back to the 1990s, a March 11, 2010 NY DOL Opinion LetterRO-090169) re-established this guidance, interpreting the New York Labor Law (NYLL) as permitting third-party employers of 24-hour home care attendants to pay their employees for 13 hours of a 24-hour shift, provided the employee is afforded eight hours of sleep, five of which are uninterrupted, and three uninterrupted hours for meals (the so-called “13-hour rule”).Thus, home care agencies have historically paid home care attendants in accordance with the 13-hour rule.

Challenges to the Long-Established Rule

As previously reported in March of 2015 and September of 2017,¹ a New York Supreme Court, Kings County Justice found that sleep and meal periods must not be excluded from the hourly wages of a home attendant who does not reside in the home of his or her client, and certified a class of over 1,000 home care attendants who worked 24-hour shifts.The decision in that case, Andryeyeva v. New York Home Attendant Agency,² was appealed to the Appellate Division, Second Department (“Second Department”).³ Also appealed to the Second Department was a New York Supreme Court decision in Moreno v. Future Care Health Srvs., Inc.⁴ In Moreno, the NY Supreme Court held that live-in home care attendants could be paid 13 hours of a 24-hour shift, regardless of whether they are “residential” and denied plaintiff’s motion for class certification on that ground.On September 13, 2017, the Second Department issued decisions in both cases, holding that non-residential home care attendants must be paid for every hour of a 24-hour shift and sleep and meal periods cannot be excluded from compensation.⁵

On April 11, 2017, the Appellate Division, First Department (“First Department”) came to the same conclusion in Tokhtaman v. Human Care, LLC et al.⁶ Motion seeking permission to appeal to the Court of Appeals was denied by the First Department and the Court of Appeals.The viability of the industry itself and thus the availability of home care services to New York residents were left in jeopardy.

The Legal Issue

The Appellate Divisions’ decisions, rested on the language in the New York Wage Order applicable to home care attendants.The applicable provision, 12 NYCRR 142-2.1, entitled “Basic minimum hourly wage rate and allowances” provides:

The minimum wage shall be paid for the time an employee is … required to be available for work at a place prescribed by the employer ….  However, a residential employee – one who lives on the premises of the employer – shall not be deemed to be …required to be available for work…during his or her normal sleeping hours solely because he or she is required to be on call during such hours; or …at any other time when he or she is free to leave the place of employment.

In the March 11, 2010 DOL opinion letter, the DOL advised that “live-in employees,” whether or not they are “residential employees,” “must be paid not less than for thirteen hours per twenty-hour period provided that they are afforded at least eight hours for sleep and actually receive five hours of uninterrupted sleep, and that they are afforded three hours for meals.”

The Appellate Divisions held that all members of the proposed class who were not residential employees who lived on the premises of the employer were entitled to be paid the minimum wage for all 24 hours of their shifts, regardless of whether they were afforded opportunities for sleep and meals.

The Appellate Divisions did not address the remaining arguments presented by the defense and the two amici curiae, such as the many public policy arguments asserted.

The defendants in Andryeyeva and Moreno each filed a motion with the Second Department, seeking permission to appeal to the Court of Appeals.

New York State Takes Action

In October 2017, the NY DOL took action and issued an emergency regulation and supporting statement in the New York State Register, clarifying its policy and interpretation of the labor law and stating that bona fide meal periods and sleep times may be excluded from hours worked by home care aides who work a shift of 24 hours or more in accordance with federal Fair Labor Standards Act regulations.⁷  The emergency regulation was in effect for 90 days, reissued again for 60 days, and is reissued every 60 days thereafter by operation of law until the NY DOL makes it a permanent regulation after following certain procedures.  It is still in effect today.

In addition, on December 29, 2017, the State of New York filed a brief as amicus curiae in support of the defendants’ motions for leave to appeal to the Court of Appeals in Andryeyeva and Moreno.

The Second Department Grants Leave to Appeal to the Court of Appeals

On March 7, 2018, the Second Department issued Decisions and Orders in both Andryeyeva and Moreno, granting leave to appeal to the Court of Appeals.  In both Orders, the following question was certified to the Court of Appeals:

“Was the decision and order of this Court dated September 13, 2017, properly made?”

With regard to Andryeyeva, the legal finding to be reviewed is as follows:

"The construction given statutes and regulations by the agency responsible for their administration, if not irrational or unreasonable, should be upheld"…. On this appeal, the defendants and the plaintiffs do not dispute the status of the putative members of the class as nonresidential employees. Thus, we must determine whether the DOL's interpretation of the Wage Order is rational or reasonable insofar as it permits NYHC's payment practices with respect to nonresidential aides. We agree with our colleagues in the Appellate Division, First Department, that the [NY] DOL's interpretation is neither rational nor reasonable, because it conflicts with the plain language of the Wage Order. The plaintiffs were required to be at the clients' residences and were also required to perform services there if called upon to do so. To interpret that regulation to mean that the plaintiffs were not, during those nighttime hours, "required to be available for work" simply because it turned out that they were not called upon to perform services is contrary to the plain meaning of "available." …. In short, to the extent that the members of the proposed class were not "residential" employees who "live[d] on the premises of the employer," they were entitled to be paid the minimum wage for all 24 hours of their shifts, regardless of whether they were afforded opportunities for sleep and meals.⁸

In addition, because Andryeyeva was on an appeal from a decision granting class certification, the Court of Appeals can also review the Second Department’s finding that the plaintiffs established the existence of the five prerequisites to class certification, and none of the factors listed in CPLR 902 warranted a denial of the motion.

In Moreno, the legal finding to be reviewed by the Court of Appeals is:

To the extent that the DOL's opinion letter fails to distinguish between "residential" and nonresidential employees, it conflicts with the plain meaning of 12 NYCRR 142-2.1(b), and should not be followed ... To the extent that the members of the proposed class were not "residential" employees who"live[d]" on the premises of their employer, they were entitled to be paid the minimum wage for all 24 hours of their shifts, regardless of whether they were afforded opportunities for sleep and meals (12 NYCRR 142-2.1[b]).⁹

Thus, the Court of Appeals will be deciding the core issues concerning home care attendant pay that are causing uncertainty in an already-struggling industry.

What Happens Next?

Within 10 days of being granted leave to appeal to the Court of Appeals, the appellant must file a Preliminary Appeal Statement.¹⁰ After the Preliminary Appeal Statement is issued, the Clerk of the Court must issue a Scheduling Letter which sets forth the briefing schedule for the Appellant’s brief, Appellee’s brief and the Appellant’s reply brief.¹¹ Parties wishing to file a brief as amicus curiae must file a motion for permission to file their brief.¹²