The New York Supreme Court, Appellate Division, issued two decisions in September that have serious ramifications for the home health care industry.  In Moreno v. Future Care Health Servs., Inc., 2017 WL 4018898 (N.Y. App. Div. Sept. 13, 2017) and Andryeyeva v. New York Health Care, Inc., 2017 WL 4019032 (N.Y. App. Div. Sept. 13, 2017), the Appellate Division, Second Department, found non-resident home health care aides must be paid minimum wage for all hours spent at a patient’s home.  These decisions mark a drastic change in the employment practices within the home health care industry and may have a lasting effect on both employers and patients in need of 24-hour care.

Historically, “live-in” home health care aides working 24-hour shifts within the patient’s home were compensated for 13 hours of their 24-hour shift.  This industry standard is in accordance with a March 11, 2010 opinion letter (“Opinion Letter”) from the New York Department of Labor (“NYDOL”), which interpreted minimum wage and overtime provisions of the New York Labor Law.  The Opinion Letter found that home health care aides working 24-hour shifts are “residential employees” and, therefore, did not have to be compensated during normal sleeping hours.  According to the Opinion Letter, live-in home health care aides only had to be compensated for 13 of the 24 hours, provided the aide was afforded at least 8 hours of sleeping time, 5 of which must be uninterrupted, and 3 hours of meal breaks.

Recently, however, the Second Department disagreed with the NYDOL finding the Opinion Letter to be in conflict with New York Labor Law. The plaintiffs in both Andryeyeva and Moreno were home health care aides employed to care for elderly and disabled patients and were required to work 24-hour shifts within the patient’s home.  Consistent with the Opinion Letter, the plaintiffs were not paid minimum wage for their entire 24-hour shift.  Instead, the Andryeyeva plaintiffs were paid minimum wage for the first 12 hours of their shift, and paid a flat rate for the remaining 12 hours.  Similarly, the Moreno plaintiffs were paid a flat rate per shift.  The plaintiffs in both cases, which were filed as class actions, argued that they were not “residential employees” and the sleep and meal break exceptions in the Opinion Letter were not applicable.  Thus, the plaintiffs contended that they were required to be paid minimum wage for the full 24-hour shift.

The Second Department agreed, finding that the Opinion Letter was neither a “rational or reasonable” interpretation of the New York Labor Law.  In both cases, the Court held that class members who maintain residences outside a patient’s home are considered “non-residential” employees and are entitled to minimum wage for the full 24-hours worked.

Andryeyeva and Moreno align with the First Department’s decision in Tokhtaman v. Human Care, LLC, 149 A.D.3d 476, 477, 52 N.Y.S.3d 89, 91 (N.Y. App. Div. 2017), and these decisions will have an enormous impact on the home health care industry.  Although these decisions may eventually be challenged before the New York Court of Appeals, in the interim home health care employers with “live-in” aides could be subject to substantial back-pay liability.  Home health care employers should consult with counsel to ensure compliance with these recent rulings.