Obama Administration Resurrects Overtime Pay Lawsuits for Home Health Agencies

A few years ago, we reported the high increase in lawsuits filed against home health agencies by their Home Health Aides (“HHAs”) claiming that the HHAs were not paid time-and-a-half for hours worked above the forty-hour work week.  This type of lawsuit cost home health agencies large sums of money attorney’s fees defending the lawsuits.  Agencies that did not settle with the HHA and fought the case were faced with the possibility of having to pay damages equal to three times the overtime wages not paid and the HHAs’ attorney’s fees.

We later reported that one of these lawsuits made it to the United States Supreme Court.  In Coke v. Long Island Home Care[1], the Court held that the overtime law did not apply to many HHAs because they were covered under the “companionship exemption” to the law and therefore certain HHAs did not have to be paid overtime wages.  However, depending on the nature of the work performed by the HHA, the HHA may still have been able to file suit.  Nevertheless, the effect of the ruling was to halt the HHA overtime wage lawsuits.

On December 27, 2011, upon President Obama’s request, the Department of Labor proposed new rules that would require overtime payment to HHAs in almost every case.  The Department’s web page states the following:

The Department is proposing to revise the regulations to accomplish two important purposes. First, the Department seeks to more clearly define the tasks that may be performed by an exempt companion. Second, the proposed regulations would limit the companionship exemption to companions employed only by the family or household using the services. Third party employers, such as health care staffing agencies, could not claim the exemption, even if the employee is jointly employed by the third party and the family or household.

In effect, the proposed regulations will require all HHAs working for home health agencies to be paid time-and-a-half for any time worked in excess of forty hours per week.

HOW TO PROTECT AGAINST A LAWSUIT

Home Health Agencies must now be critically be aware of their potential liability for overtime pay, and they should enact certain procedures and protocols in order to be able to defend against the potential for liability and lawsuits.   Policies and procedures should be implemented to document how many hours an HHA works as the lack of documentation will doom any chances an Agency has in successfully defending a case.

While nothing a Home Health Agency can do will prevent the filing of a lawsuit, there are certain measures that can be taken to defeat an overtime pay claim.  Here are the steps that Home Health Agencies should take to protect themselves:

  1. The Fair Labor Standards Act requires records be kept on total hours worked each day and each workweek for employees in overtime eligible positions to determine when they are eligible to receive overtime compensation.  Records must be kept on total hours worked each day and each workweek for employees in overtime eligible positions to determine when they are eligible to receive overtime compensation. Timesheets should be signed by the HHA and kept for four years.
  2. Have the HHA sign a company policy statement that states any overtime work must be first approved in writing by the Agency. The policy should include a statement prohibiting HHAs from working through lunch, working early or working late.  Overtime pay may not be waived by agreement.
  3. Travel time required to visit a patient at their home is considered work time for the purposes of overtime wages.  When assigning HHAs to a patient, include the time traveling as part of the time worked by the HHAs.  All schedules provided to HHAs should be signed by the HHAs.  Then have the HHAs write down the exact time it takes to travel to and from patients’ homes.  Adjust the HHAs schedule accordingly leaving adding some extra travel time to be safe.  Travel time to and from work is not calculated as hours worked but time driving from one patient to another is considered work time.  For the exact rule, see 5 CFR 551.422(b).

These are some basic steps you can take to protect yourself.  It is not meant as a legal opinion.  Overtime pay is calculated by statute.  Please consult with your attorney to implement any policies related to overtime work and wages.


[1]  376 F.3d 118 (2nd Cir. 2004).

Manny R. Lopez, Esq., is an attorney with over thirteen years of experience in the healthcare industry. His practice concentrates on health law transactions, regulatory compliance and litigation.