On March 26, 2019, the New York State Court of Appeals, New York’s highest Court, issued a highly anticipated decision that has major impacts for the home health care industry in New York.  The question before the Court was whether “live-in” home care aides are entitled to be paid for every hour of a 24 hour shift, even if they receive adequate sleep and meal breaks.  Notwithstanding the Department of Labor’s position that such aides are only entitled to 13 hours of pay, in recent years Courts in the First and Second Department Appellate Divisions held that the aides are entitled to 24 hours of pay irrespective of sleeping/meal time.  The Court of Appeals reversed, and potentially saved the home care industry from complete collapse.

Since 1972, home care aides in New York have been subject to the Department of Labor’s minimum wage order (the “Wage Order”).  In summary, the Wage Order provided that a “residential employee” was not available for work, and thus not entitled to pay, for time that they were sleeping and/or eating.  Because questions arose regarding the application of the Wage Order to home care aides, in March, 2010, the DOL issued an opinion letter stating that live-in home care aides are not deemed to be working during normal sleep or eating hours, and thus should be compensated for 13 hours of a 24 shift, the remaining 11 hours excluded from the calculation of compensable hours as 8 hours for sleeping, and 3 hours for meals.

Two class actions entitled Andryeyeva v. New York Health Care, Inc. and Moreno v. Future Care Health Servs., Inc were brought by individuals on behalf of themselves and others similarly situated in the Supreme Court, Kings County.  Similarly, a matter entitled Tokhtaman v. Human Care, LLC, was brought in the Supreme Court, New York County.  In each action, the Plaintiffs, live-in home care aides, challenged the DOL’s interpretation of the Wage Order, and claimed that they were entitled to compensation for every hour of a 24 hour shift, irrespective of whether they were sleeping and/or eating.  The Plaintiffs argued that because they are “on call”, and thus available for work at any moment, the DOL’s exclusion should not apply.

The First Department in Tokhtaman, followed by the Second Department in Andryeyeva and Moreno, agreed with the Plaintiffs, and ignoring long standing precedent that gives deference to DOL interpretations of wage statutes, held that live-in aides should be compensated for each and every hour of a 24 hour shift regardless of the time spent sleeping and eating.  These decisions, if upheld, would have had a devastating impact on the home care industry.  Recognizing this, as a direct result of the Appellate Divisions’ decisions, on October 25, 2017, the New York Department of Labor issued an emergency order (the Emergency Order) amending the Wage Order to explicitly exclude sleep times and meal periods from hours worked.  The DOL made clear that it issued the Emergency Order “to prevent the collapse of the home care industry, and avoid institutionalizing patients who could be cared for at home, in the wake of recent State Appellate Court decisions. . .” (The Emergency Order was ultimately invalidated by the New York County Supreme Court on the grounds that the DOL failed to establish an “emergency situation”).

The defendants in Andryeyeva and Moreno appealed to the New York Court of Appeals which consolidated the appeals for disposition.  On March 26, 2019, the Court of Appeals reversed the Appellate Divisions, citing the State’s long standing policy of giving judicial deference to agency determinations.  The Court held, among other things, “Plaintiffs mistakenly argue, and the Appellate Division erroneously concluded, that once a worker is physically present at the designated work site, they are thus able to work if called upon and so are ‘available for work’”.  The Court gave credence to the DOL’s expertise in interpreting wage orders, and handling labor law violations as well as its “historical efforts to ensure that its policies reflect the realities of the diverse industries and occupations over which it has administrative oversight”.

The significance of the Court of Appeals’ ruling cannot be understated.  As recognized by the DOL in issuing the Emergency Order, the fate of the home care industry was threatened if Andryeyeva and Moreno were upheld.  Home care providers simply could not afford to pay the millions that were claimed by the Plaintiffs in Andryeyeva and Moreno and numerous related cases, the effect of which would be felt far and wide, not just by the home care agencies, but their employees, and most importantly, the patients.

The Court of Appeals’ decision did not end the cited litigations, however.  The Court referred the actions back to the Supreme Court, where the litigants will likely conduct the fact specific analysis of whether employees were indeed provided with adequate sleep and/or meal time.  But in the meantime, at a minimum, home care providers now have the guidance they require to ensure that they are compensating their employees correctly pursuant to the Wage Order.