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The Court of Appeals for the D.C. Circuit has sent a clear message to the employers of home-healthcare workers and redefined exempt employees as only those who are directly hired by the person or the person’s family and not an outside agency.

This ruling updated the Fair Labor Standards Act (FLSA) definition that groups all companionship or domestic service workers together without differentiating between them. It means that even live-in caretakers will receive overtime pay if they work more than 40 hours per week. The outside agency must pay their employees at least minimum wage plus overtime.

The Court considered a 2007 U.S. Supreme Court decision, Long Island Care at Home, Ltd. v. Coke, that gave the Department of Labor the authority to interpret the companionship exemption when it implemented those standards. The DOL held that third-party workers were exempt, but Coke, a companionship worker, challenged that exemption and asked for minimum wage and overtime. Although the DOL upheld the exemption, the case set precedent in determining how the definition was applied. Thus, the Supreme Court agreed that the DOL had the authority to decide which workers were included and who was exempt in accordance with FLSA laws.

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The National Labor Relation’s Board decision regarding joint-employer status for workers formerly not classified as employees in the case of Browning-Ferris Industries of California, Inc. includes numerous implications for employment law. Here are 7 potentially important ones:

1.    The Wage and Hour Division, and by extension, the FLSA, will likely look to this decision to expand who they charge in related employment violations.

2.    In the past, many employers have tried to distance themselves from workers, thus avoiding an employer-employee relationship and limiting overhead by hiring employees through a secondary agency. This ruling will curtail those behaviors.

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By a vote of 3-2, the National Labor Relations Board revised how it will decide joint-employer status, a move that will affect nearly three million temporary workers across the nation. The Board determined that the prior standard fell short of keeping up with workplace and financial needs, and the new standard represents the existing market more accurately.

The new definition for joint-employers includes the following:

1.    Both parties meet the criteria for employers according to common law, and /or

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When most people read in the news about restaurants and other businesses violating New York Labor Law (NYLL) and the Fair Labor Standards Act (FLSA), they get upset and shake their heads. But there’s a lot of bad news out there, and people’s attention spans are spent. So most people don’t dwell on such stories and develop a visceral understanding of how minor but chronic wage theft degrades the lives of employees.

To that end, let’s humanize this issue. Imagine you’re a waitress who just moved to New York City from Ohio to make it on Broadway. You take a job at a nice restaurant as a day job to pay the bills while you pursue your passion. At the eatery, you earn $15 an hour, after tips, and land 20 hours a week’s worth of work. That means you bring home $300 a week or $1,200 a month from this part time work. (Fortunately, you also have savings to supplement, so you can afford to scrape by in our admittedly pricey city.)

Now let’s say your employer does something shady: he shares your tips illegally and also doesn’t pay overtime when you work overtime. In the grand scheme of things, this “nickel and diming” might not seem so terrible. Let’s say it knocks down your average hourly wage down to $18 an hour. A difference of “just” $2 an hour from what you should get paid.

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In our last post, we discussed a Federal Judicial Center (FJC) analysis that’s found a dramatic rise in the number of wage-and-hour cases filed throughout the U.S. over recent years.

Drilling down to a more local level, a parallel trend in FLSA actions has occurred here in New York State:

•    In fiscal year 2009, plaintiffs filed 652 wage-violation cases in New York State alone.

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In Part 1 of this series, we discussed how and why the salary minimum for the “white collar” overtime exemption may soon change. In this post, we’ll examine how workers will be impacted by the Department of Labor’s (DOL) new proposed rules.

How Many Workers Will Be Affected

The DOL predicts that if the proposed change becomes final, 4.6 million more workers will become eligible for overtime pay during the first year the change goes into effect. Those millions of workers will include people who are classified as executive, professional, or administrative, and who earn more than $23,600 but less than $50,440 per year (more than $455 but less than $970 per week). Over the next 10 years, an additional 5.6 million more workers could also become eligible for overtime because of this rule change.

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