Workers Exempt From Labor Law

By: Leigh Jones
New York Law Journal
May 30, 2003

Ruling on an issue untested in the 2nd U.S. Circuit Court of Appeals, a district judge has found that federal regulations exempting some domestic service workers from minimum wage and overtime benefits also are enforceable against those workers employed through agencies.

Eastern District Judge Thomas C. Platt determined that a Queens woman previously working as a home care attendant for Long Island Care at Home was not entitled to overtime pay and minimum wage protections due to an exemption to the Fair Labor Standards Act.

In Coke v. Long Island Care at Home, 02-CV-2010, Judge Platt wrote that although he was "sympathetic to home care workers who perform such laborious work under difficult circumstances," he could not strike a federal regulation that creates an exception to the labor law's protection.

The judge therefore granted Long Island Care at Home's motion to dismiss the plaintiff's federal claims and also threw out corresponding state law claims.

In general, employers of domestic workers are required to pay minimum wage and overtime compensation because of a 1974 amendment to the Fair Labor Standards Act, 29 U.S.C. §§ 201, originally enacted in 1938. In giving these workers protection under the amendment, Congress wrote that it wanted to "improve the sorry image of household employment."

However, exemptions apply to those hired as casual-basis babysitters and to those who provide companionship services.

The regulations define companionship service as providing fellowship, care and protection of people who cannot take care of themselves because of advanced age or infirmity. The regulations also state that workers who provide companionship services and who also work for an agency or employer other than the household using their services are exempt from the Fair Labor Standards Act.

Arguing against Long Island Care's motion to dismiss, plaintiff Evelyn Coke asserted that the regulations' definition of companionship services was overbroad and that the regulations contradicted the 1974 amendment to the federal law that generally served to protect domestic service workers.

Specifically, she asserted that before the 1974 amendment, she would have been protected by the Fair Labor Standards Act as an employee working for a company required to provide "enterprise coverage" to its domestic service workers because its gross revenue exceeded a minimum.

Ms. Coke reasoned that since the 1974 amendment was enacted to extend coverage, its regulations promulgated in 1975 exempting agency workers contradicted the amendment's purpose.

She also argued that, as a domestic worker, she would have been eligible for the federal law's protection if not for the overly broad definition of companionship services.

Judge Platt, however, was not convinced, noting that although the 2nd Circuit has not expressly ruled on the validity of the regulations, "nearly all courts" have upheld them.

Department of Labor

In reaching his decision, the judge consulted the extensive history of the regulations' promulgation. He observed that in 2001, the U.S. Department of Labor planned to include employees working for companies or agencies within the Fair Labor Standards Act's protection in order to create an "internal consistency" with the 1974 amendment.

However, that plan was abandoned last year after several federal agencies challenged the Labor Department's conclusion that including those types of workers under the Fair Labor Standards Act would have little economic impact.

"The DOL's withdrawal of the proposed amendments shows that it still believes that these long-standing regulations are appropriate in the current home healthcare environment," he wrote in his 21-page decision.

During the Department of Labor's consideration of the 2001 changes to the regulations, the district court in the Northern District of Illinois held that the regulations, as they stood prior to the proposed changes, improperly exempted companionship service workers from the Fair Labor Standard Act's protection.

The Illinois court in Harris v. Sims Registry, 2001 U.S. Dist. LEXIS 23263, also held that the regulations' definition of "companionship service" was overbroad.

Taking Harris into consideration, Judge Platt likewise noted that all courts prior to the proposed 2001 changes upheld the regulations' validity.

"Whether the service is provided by the direct hiring of an employee through the use of an agency, the objective is still the same: to allow for the procurement of companionship services without being required to meet the minimum wage and overtime provisions of the FLSA," he wrote.

Leon Greenberg of Manhattan represented Ms. Coke. Arnold Klein of Meltzer, Lippe & Goldstein in Mineola represented Long Island Care at Home.