by Susan L. Swatski, Esquire (email / link to bio)

Wage and hour matters are prominent in employment law news these days as a result of the new Federal health care laws – the Patient Protection and Affordable Care Act of 2010, Pub. L. 111-148 and the Health Care and Education Reconciliation Act of 2010, Pub. L. 111-152 (collectively, the “Health Care Laws”). These laws not only will change the availability of health insurance, but also how health care is delivered in America, specifically with respect to direct-care staff.

Direct-care staff are individuals who provide domestic services such as nursing aides, companionship and home heath assistants. As the population ages and people shy away from institutional health care, direct-care workers comprise one of the nation’s fastest growing occupations.

A primary focus of the Health Care Laws is the wages of direct-care staff . According to the U.S. Department of Health and Human Services (“HHS”), the real wages for these workers, which are far below the median for all occupations, have remained flat over the last decade. As a result, the Health Care Laws required HHS to establish a workforce advisory panel for direct-care workers. Beginning in 2011, this panel will be responsible for tackling the challenge of improving wages for these workers.

The Fair Labor Standards Act (FLSA) was enacted to ensure a minimum standard of living for workers by establishing a minimum wage, overtime pay and other protections. The FLSA traditionally has excluded direct-care workers from its umbrella of protection. In a landmark 2007 decision, the U.S. Supreme Court upheld HHS’s authority to define exceptions to the FLSA (see Long Island Care at Home, Ltd. v. Coke). Current law, however, still excludes direct-care workers.

Pending Legislation

In response to Long Island Care at Home, Ltd. and the Health Care Laws, on July 30, 2010, Representative Linda Sánchez (D-CA) introduced the Direct Care Workforce Empowerment Act (H.R. 5902) to limit the FLSA exclusion of direct-care workers to those who work 20 hours or less per week. On August 3, 2010, Senator Robert Casey (D-PA) introduced a companion bill (S. 3696) in the Senate. The proposed bills’ Findings state that in the direct-care industry “working conditions are often difficult and turnover is high because of low pay, access to health insurance and other benefits, strenuous conditions…”

The Findings also report that 13 million Americans currently are receiving such services and that “two-thirds of older adults will need some form of long-term care at some point in their lives.” Although both bills are languishing in their respective committees (the House bill was referred to the Committee on Education and Labor and to the Committee on Energy and Commerce, and the Senate bill was referred to the Committee on Health, Education, Labor and Pensions), strong support from HHS and the White House likely will keep this issue in the forefront in the 112th Congress, regardless of which party is in the Congressional majority.

Record keeping and timekeeping issues are an inevitable consequence if the proposed amendment is enacted, because direct-care workers generally have significant “down time” when they are able to pursue their own activities. Such gaps in active work time will raise issues as to whether the worker is “engaged to be waiting” or “waiting to be engaged” and thus, “on the clock.” The key is to be proactive and not get caught unaware in a wage and hour dispute.

Confronted With a Clear Wage and Hour Violation – Make An Offer

A recent U.S. District Court case provides a good example of an employer turning a bad situation into a win simply by making an offer. See Simmons v. United Mortgage and Loan Investment, LLC . In Simmons, the defendant mortgage company misclassified a group of “junior asset managers” as salaried “exempt” employees. The employees sued in an opt-in class action.

In an effort to stave off years of class action litigation and recognizing that a likely violation of the Fair Labor Standards Act occurred, the employer confronted the situation head-on by making an offer of judgment under Federal Rule of Civil Procedure 68. The offer provided for “full relief for all parties,” including those that would be opt-in plaintiffs. In sum, the employer offered full relief to which the plaintiffs could have been legally entitled.

For unidentified reasons, the plaintiffs rejected the offer, pounding the death knell into their case. The court held that the defendants’ offer mooted the action by depriving the court of subject matter jurisdiction – no justiciable case or controversy – resulting in the dismissal of the case.