The Maryland Court of Special Appeals affirmed in an unreported decision that employees who provide at-home care for elderly and disabled at their homes are, in fact, entitled to overtime under Maryland law in Maryland. Peters v. Early Healthcare Giver, Inc., No. 0018 (July 25, 2012) (Wright, J.).
In Maryland, the court noted that the Fair Labor Standards Act, which in 2012 and still today exempts home-based “companionship” employees from a right to overtime, is only “a floor, not a ceiling.” It does not preempt state law wage protections, which can be greater than the federal floor. Id. Overtime accrues at 1.5 the rate of regular pay “for each hour over 40 . . . during one workweek.” Id. (quoting Friolo v. Frankel, 373 Md. 501, 513 (2003)).
Maryland’s Wage and Hour Law provides Maryland’s overtime and minimum wage rights. Md. Lab. & Empl. Code Ann. § 3-401 et seq. (Lexis 2015) (“MWHL”). This year on January 1, the MWHL minimum wage rose from $7.25 to $8.00 per hour. Here’s some more good news for minimum wage workers: It will be $8.25 on July 1 this year.
Further, it will rise each July 1st thereafter, until peaking to $10.10 hourly on July 1, 2018. The Maryland Minimum Wage Act of 2014 (HB0295) (amending MWHL § 3-413).
Maryland law requires employers to pay overtime to “at-home care” workers if the employer is for-profit, but not if the employer is a “not for profit entity.” MWHL § 3-415(b)(6). In the Peters case, the company was unmistakably for-profit. They also had tried to designate the certified nursing assistant involved as an “independent contractor” to escape various duties and obligations. The Peters decision held that overtime applied. It was affirmed above on different, also important grounds. Peters v. Early Healthcare Giver, Inc., 439 Md. 646 (2014).
Nationally and recently, overtime rights for the “at home” care workers—or lack thereof—have made news. Last year, the U.S. Department of Labor (“DOL”) revised regulations to restrict the at-home care “companionship” exemption under the Fair Labor Standards Act (“FLSA”) to only employees employed by the family directly. See 29 U.S. Code § 213(a)(15). The new regulations were coming into effect this year. However on December 22, 2014, the regulations were vacated as an agency interpretation in direct contradiction to Congressional intent. Home Care Association of America, et al. v. David Weil, et al., No. 14-cv-967 RJL, Mem. Op. Dec. 22, 2014) (vacating DOL regulation published at 78 Fed. Reg. 60,557 & 29 C.F.R. § 552.109).
In this recent decision, the U.S. District Court held that the “companionship” exemption at the federal level, unlike other FLSA exemptions, did not permit the DOL to distinguish among “who cuts the check rather than what work is being performed.” Simply put, the DOL can define “companionship” conduct further through regulation, but NOT according to the identity of the employer. Third party employers comprise 90% of the U.S. at-home care industry, noted the District Court.
