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Caregivers who provide companionship services to disabled patients living in the caregiver's home are not entitled to overtime pay, the Eighth Circuit ruled on Tuesday. The case arose after workers for United Cerebral Palsy of Central Arkansas sued, arguing that keeping patients in the workers' homes "requires additional worktime that should be compensated as overtime."
The Eighth Circuit disagreed, finding that such work constituted providing companionship services in a "private home" and was thus exempt from overtime pay under the Fair Labor Standards Act.
Instead of having caregivers come to patients, or serving patients in a group home setting, United Cerebral Palsy takes an alternative approach: patients move in with their caregivers. And while caregivers are UCP employees, UCP claims it has little control over the living arrangement. It does not set rent, it does not control how long a client can stay in a home, and it does not even mandate that employees and clients live together.
Instead, all those details are arranged independently between employee and client, "a relationship over which UPC has exerted no control," according to the Eighth Circuit. UCP pays those employees a flat daily rate for their care.
In March of 2012, Lisa Fezard, a UPC employee, told the company that she had filed a complaint with the Department of Labor claiming that UCP was violating the FLSA by not paying overtime. Fezard hadn't actually filed a complaint, but UCP fired her nonetheless. Fezard sued.
The Fair Labor Standards Act generally requires overtime pay for employees who work more than 40 hours a week. One of the many exceptions to that rule, however, is the "domestic service employment" exception. Under the FLSA, domestic service employees who provide "companionship services for individuals who (because of age or infirmity) are unable to care for themselves" are not entitled to overtime pay. Department of Labor regulations further defined, in 2012, domestic service employment as "services of a household nature" performed "in or about a private home."
Since the Eighth Circuit had never interpreted "private home" for purposes of the FLSA before, the district court looked to the Tenth Circuit. Applying the factors laid out in the Tenth's Welding v. Bois Corp decision, the court found that Fezard worked in a private home. UCP lacked control over the living arraignment, the court found, and was not responsible for the hours worked.
On appeal, the Eighth Circuit approved of the district court's determination, but noted that the Welding factors "fall short because of factual distinctions present here." Welding examines six factors, from who owns the living unit, to whether the client could live in the unit if not contracting services. Other cases add additional considerations, including public funding, the number of residents, and who has access to a home.
Here, however, the dwelling units "involve an employee acting as an independent third party," the Eighth noted, differentiating them from previous caselaw. Instead of a host of factors, the fundamental question is simple: does the employer own or control the home?
In the case of UCP, the employees controlled the home, the Eighth found, making it a "private residence" under the FLSA. Not only did UCP employees use their own homes, with little UCP involvement, but many of them also treated clients as tenants, charging them rent in addition to the daily UCP payments.
The ruling, though, may be of limited impact. A year after Fezard's dispute, the Department of Labor began revising its home care worker exceptions policy, expanding FLSA minimum wage and overtime protections to millions of home care workers.
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