Home Care Law Blog

New Federal Court Wage and Hour Case

Earlier this month, the Third Circuit Court of Appeals (which covers Pennsylvania, New Jersey, Delaware and the Virgin Islands) issued a ruling in a wage and hour case that is of interest to the homecare industry.  The case, Smith v. Johnson and Johnson, involves a wage and hour lawsuit brought by a "Senior Professional Sales Representative" of McNeil Pediatrics.  McNeil is a wholly owned subsidiary of Johnson and Johnson.  

As a Senior Professional Sales Representative, the plaintiff worked more than 40 hours each week and received a salary of $66,000.  In her complaint, the plaintiff alleged that she was a non-exempt employee under the Fair Labor Standards Act and, therefore, entitled to receive overtime for hours worked in excess of 40 in a work week.  Johnson and Johnson defended the claim by arguing that Ms. Smith was either exempted from the overtime requirements of the Fair Labor Standards Act as either an "outside sales professional" or an "administrative professional."

[Quick refresher: the Fair Labor Standards Act requires employers to pay employees who do not fit into one of the Act's exemptions minimum wage and overtime.  These employees are known as non-exempt employees.  The Act has a number of exemptions.  Depending upon the exemption, the exemption may state an employee that falls into the exemption is not entitled to minimum wage, overtime, or both.  These employee are known as exempt employees.  You should also be aware that state law may eliminate exemptions.]

The Court's opinion focuses on the administrative professional exemption and its application to the plaintiff.  Both sides conceded that the plaintiff was paid a salary that met the salary basis of pay requirement for the exemption.  [NOTE:  Paying a salary alone does not make an individual exempt.  It is one part of other exemptions.]

The real dispute was over the exemption's other requirements:

    1.    The employee's primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and

    2.    The employee's primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

The Court relied heavily upon the plaintiff's deposition testimony in determining that she met both of these requirements.  The key facts in the case were derived from the plaintiff's deposition.  The plaintiff testified in her deposition that her position required her to travel to various doctors' offices and hospitals where she extolled the benefit of her employer’s drug to physicians.  The employer hoped that the doctors, having learned about the benefits of the drug would choose to prescribe it to their patients.  Plaintiff did not sell the drug to the doctors, but simply educated them on its benefits.

The plaintiff testified in her deposition that she enjoyed the freedom her position provided, including being completely unsupervised 95% of the time.  The employer provided the plaintiff with a list of target doctors.  She was required to complete an average of ten visits per day and to visit each doctor on the list at least once each quarter.   However, the employer left the itinerary and order of the visits to Plaintiff’s discretion.  The Employer also gave the Plaintiff a budget which she could use to take doctors to lunch or sponsor seminars.  The plaintiff had complete discretion in how to use the budget.

The Plaintiff stated in her deposition that she was free to run her territory as she saw fit.  She was expected to develop a strategic plan for her territory to maximize "sales".  The employer agreed that the plaintiff was the expert on her territory and was expected to determine how best to maximize business results in her territory.

The Court ruled that the plaintiff's responsibility to develop a strategic marketing plan designed to maximize sales in her territory fit the "related to management or general business interests" portion of the exemption.

The Court then ruled that the plaintiff's position fell within the exercises discretion portion of the test.  The court found this, because the plaintiff performed her duties without direct oversight and even considered herself "as the manager of her own business who could run her own territory as she saw fit."

For these reasons, the Court ruled the plaintiff was exempt and not entitled to overtime.

For home health, private duty, and hospice providers that employ their own marketing staff, this case raises the possibility of structuring a marketing professionals job in such a way to qualify them as an exempt administrative professional.  It is important for providers to know that the court did not issue a blanket ruling that all sales professionals are exempt administrative professionals.  The court was very specific that this is a fact sensitive inquiry.  Not every sales professional will be exempt. 

To reiterate, this case creates the possibility, based upon specific facts, that sales professionals may be exempt.  You should not assume every case will be resolved the same.  If you think your sales professionals might fit this exception, you should review the facts of your marketing staff's situation with knowledgeable legal counsel. 

Increased DOL enforcement on the horizon.

President Obama's FY2011 budget makes it clear that the DOL is going to be continuing to increase its enforcement efforts in the coming years.  Amongst requests in the budget are requests to hire 177 new inspectors and investigators.  Secretary Solis also stated that DOL would be moving about 35 inspectors from compliance assistance roles to enforcement.

One of the areas that will see increased enforcement under the new budget is the misclassification of employees as independent contractors.  The budget includes an additional $25 million dollars which will be used to hire an additional 100 investigators and other enforcement personnel.  These new hires will be tasked with identifying misclassified employees.  The DOL will undertake this effort in conjunction with the Department of the Treasury.  The administration plans to recover $7 Billion over the next ten years from that effort.  That sounds like health care fraud recovery numbers.  This illustrates that the DOL is very serious about this effort and will be working hard to find employers who misclassify.

This is important to home health, hospice, and home care providers, because misclassifying individuals as independent contractors is a mistake many home health, hospice, and homecare employers make.  For example, many employers incorrectly believe that by having an employee sign a "contract", that employee is an independent contractor.  Employers want their employees to be independent contractors, because it limits their liability, saves them money, etc.  (And it would, if they correctly classified them, unfortunately misclassifying employees increases your liability.)

The problem for most home health, hospice, and homecare employers is that the employer is usually wrong when it decides an individual is an independent contractor.  There are several different tests used to determine whether an individual is an employee or an independent contractor.  For example, the FLSA (minimum wage and overtime law) has a test, the IRS has a test, and there are state law and common law ("court created") tests as well.  With all of these different tests, an individual's classification must be carefully considered.  

As a general rule for home health, hospice, and private duty, the individual is going to be an employee, not an independent contractor.  I say as a general rule, because there are exceptions.  (I am not going to attempt to explain the exceptions, because this blog is not the place to plumb the depths of independent contractor v. employee.  The main point here is that you are safer if you classify an individual as an employee.  If you think they might be a contractor, seek the advice of an attorney.  DO NOT ASSUME THEY ARE A CONTRACTOR!!!)

If you are found to have misclassified individuals, you will have a great deal of liability - back pay, taxes, etc.  Employers who have classified members of their workforce as independent contractors, without the advice of counsel, should review that decision with their attorney.  You have been warned that this is an enforcement priority of the DOL, which means you should check to ensure you are in compliance.  You would much rather catch your mistake and take steps to fix it than have the DOL catch your mistake later or worse, have one of your employees retain an attorney who files suit. 

Companionship services exemption in the news.

Just when you thought that health care reform had completely diverted attention away from the companionship services exemption, the exemption rears its head again.  The New York Times published this editorial recently advocating for the removal of the companionship services exemption.  It is yet another plea (they have published several similar editorials over the years) to end the companionship services exemption's availability for the homecare industry.

Of course, the editorial is long on "schmaltz", mentioning the pen President Obama gave to Lily Ledbetter and how Evelyn Coke's recent passing prevents a similar event for her, but short on substance.  It fails to address any of the economic realities regarding the exemption, its use in home care, and how eliminating it would impact the cost of providing home health care and the availability of home health care.  (Funny how critics of the exemption never mention any of the results of eliminating it, like the increased costs to state Medicaid programs or the decrease in incomes for aides.)

This editorial was quickly followed by a letter to the editor written by Steven Dawson, President of PHI.  (PHI is closely affiliated with everyone's favorite union - SEIU.  PHI has long advocated the elimination of the companionship services exemption.) Mr. Dawson's letter states that it is "long past time" for President Obama to instruct the DOL to reverse itself on the Companionship services exemption.  Mr. Dawson also mentions that one in three homecare workers are without health insurance. (Ahh, there' the health care reform tie-in.) 

Reversing the companionship services exemption continues to be a goal of SEIU and Labor.  It has not gotten a lot of attention lately, due to health care reform, but clearly it is still a target. Providers should continue to keep an eye on this.  Given the pressure Congress is currently under, I don't know if we will see this addresses legislatively, but this is the second time time in the past year the idea of having the DOL eliminate the exemption through the rulemaking process has been proposed.  (You may recall a group of 15 senators asked the President to do this very thing last summer.)  DOL would have to go through the rulemaking process to do this, which would give providers a chance to comment.  Unfortunately, as anyone who has participated in this process knows, the agency does not have to listen to your comments.

Of course, this may continue to be a non-issue, due to the fading prospects for Big Labor's agenda.  As this trend continues, it may be harder and harder for the Big Labor to convince the administration to move on some of these issues, especially with health care reform still on life support.  This is just one more thing to keep an eye on, and to be ready to take action on, as the year goes forward. 

NIOSH Issues Home Healthcare Occupational Hazards Review

The National Institute for Occupational Safety and Health ("NIOSH") just issued its Home Healthcare Occupational Hazards Review.  The Review concludes that one of the biggest risk areas for home health care workers is for musculoskeletal Disorders due to transferring patients.  This likely does not come as a huge surprise to anyone who has worked in home health, home care, or hospice care for any period of time.  Lifting patients, moving patients, etc., can all lead to back and other injuries for homecare workers.  The review discusses a number of "interventions" designed to help reduce the risks to employees.

The article states that while using two trained employees to transfer patients can reduce the risks of injury, it does not reduce the risks sufficiently.  NIOSH advocates a "zero lift" policy.  This policy grows out of a study performed at seven nursing homes and one hospital in which patients were lifted or transferred only with the use of appropriate equipment.  This led to significant reduction in employee injuries.  NIOSH concludes that "[w]henever possible, devices should be used to help with patient transfers."  This is a good point, but the authors seem to have overlooked a key problem - home health and facilities are different - they go into a patient's home and often rely upon the equipment the family has obtained.  For example, a patient may have a hoyer in the home, but refuse to allow the agency to use it or not have sufficient slings.  (The family has one sling to use for showering, but after the shower, there are no dry slings.  So much for the hoyer.)

The article discusses a number of ergonomic devices an agency can use (it even has pictures) as well as other strategies.  For example, using a rolling toileting/shower chair reduced the number of patient transfers from six to two.  Properly identifying equipment for the patient, and considering the patient transfer issue when assessing and care planning can reduce the number of times your employees have to lift the patient.  This reduces the potential risk of injury.

One thing I do think the article gets right is the suggestion to consider these assistive devices during care planning.  You might consider if the patient would be able to obtain some of this equipment through Medicare/Medicaid.  The provider may not be able to afford it, but if the patient can obtain it through Medicare/Medicaid, it would be beneficial for the patient, family, and agency to obtain them.  Working with the family in this fashion and helping them to understand the importance of this type of equipment and to obtain the equipment benefits everybody.

The review also touches on other areas of risk including latex allergies, exposure to bloobdorne pathogens, occupational stress, violence, infectious disease, animals, hygiene, and other risks. 

The review is worth reading, if for no other reason, than as a tool to review and rethink your safety policies and procedures.  There are a number of interesting studies they cite and statistics on occupational safety.  You may not agree with all of it, but it might give you a few ideas that reduce employee on the job injuries (and your worker's comp claims.)  It also has a multiple page "Chekclist" that you can use as an worker safety assessment tool.   Going through the checklist will help you to see how your current safety plans compare to what NIOSH thinks you should have.  This will help you to identify any  deficiencies so that you can correct them.

The Massachusetts Election and HomeCare and Hospice

Well, by now, I am sure you are all aware that Scott Brown won in Massachusetts.  This is not a political blog, per se, but the news this morning is covering how Scott Brown's election will effect the passage of a number of bills that are of concern to the home health, private duty, and hospice industries.

The first issue getting a lot of attention is whether or not Scott Brown's victory is the death knell of health care reform.  Many Democrats appear to be signaling that it is time to back away from the current bills and rethink health care reform.  This article also has some great quotes about the status of health care reform after last night.   Some Congressional Democrats are saying everything should be put on hold until Scott Brown is sworn in (you can read that story here).  Barney Frank was quoted as saying they may need to start over.  Susan Collins even specifically mentioned starting over and getting away from a bill that included the steep cuts to Medicare.  These articles give a pretty strong impression that the current bills, which were terrible for the home health industry are dying, if not completely dead.  If this is the end of health care in its current form (which seems likely) the election last night may have saved the home health industry from the draconian cuts proposed by the House and Senate.

Of course, this is not done yet.  Providers need to keep a close eye on what is happening.  Until the bills are officially scrapped and Congress starts over, the cuts are not dead.  Furthermore, if Congress starts over, the home health industry will need to keep a close eye on what they propose and, if necessary, be ready to respond loudly and clearly (you may find your representatives more willing to listen now).  Based on today's reports, it seems that health care reform may ultimately go forward, but in a much different fashion.  If so, home health providers may be able to breathe a sigh of relief that the $55 billion dollars in cuts will not happen.   

Another area of interest to the home health, private duty, and hospice industry is the Employee Free Choie Act.  At least two outlets (here and here) are predicting that the election of Scott Brown is the end of the Employee Free Choice Act for this year.  Scott Brown was clear in his campaign that he was opposed to the EFCA.  This is another bit of great news for the industry. (Although it is only a prediction.)  This aspect of the election has not gotten much press, because of the focus on health care reform, but it appears that with the election of Scott Brown, supporters of the EFCA no longer have the votes they need to pass the bill. 

[There was an interesting side note during the campaign in Massachusetts.  SEIU members were out campaigning for Brown while SEIU's leadership was campaigning for Coakley.  Here is the video.  

This video says a number of things, but I like to think it shows that  the union's leadership is out of touch with its members.  Always a good point to raise when in the midst of a union campaign.)

Happy New Year: Here comes OSHA

I meant to be back at the blog last week, but my Christmas vacation, but I ended up being out longer than anticipated due to illness.  Anyways, I am back and hope to post even more regularly this year.

With that said, a friend forwarded me an e-mail from her nursing association list serve that brings up even more areas for home health, home care, and hospice to be worried about in 2010.  According to a recent online Q&A with Secretary of Labor Solis, OSHA (the federal agency, not the state level agency) is looking at airborne infectious disease and patient safe handling issues for its regulatory agenda in 2010.

Secretary of Labor Solis stated that OSHA will publish a request for information in the federal register in March.  OSHA's standard would likely require health care employers to protect health care workers from SARS, tuberculosis, and influenza.  OSHA issued an enforcement directive on H1N1 in November.  You can download it here.  

Secretary Solis was asked during the Q&A if the OSHA standard would be modeled on the California standard.  Solis replied that the California standard "would certainly be one important piece of information that OSHA will consider in deciding whether to propose or issue a standard."  

Although during the Q&A the Secretary did not specifically commit to such a standard, the fact that they did state a request for information would be published in the Federal Register indicates they will move forward with this.  Responding to that request for information will be important.  This is the first opportunity the industry will have to share its thoughts (read objections) with the Department of Labor. 

Providers should keep a close eye on this and be prepared to respond to the DOL.  A national standard on protecting employees form airborne transmissible diseases is likely to be fairly burdensome to home care and hospice providers.  

FMLA Update

My partner, John Gilliland, asked me to pass the following information along regarding recent amendments to the FMLA.

On October 28, 2009, President Obama singed into law the National Defense Authorization Act of 2010.  It amends the Family and Medical Leave law ("the FMLA") in several respects that will require changes to your existing FMLA policies concerning exigency leave and military caregiver leave.

For exigency leave, the current Department of Labor regulations limit this leave to the spouse, son, daughter, or parent of Reserve or National Guard members.  The new law extends the entitlement to exigency leave to the spouse, son daughter, or parent of active duty members in the regular Armed Forces as well as members of the Reserve and Guard.

For military caregiver leave (also known as leave to care for a covered service member with a serious injury or illness), the new law expands the leave to cover caring for veterans who are undergoing medical treatment, recuperation or therapy for a serious injury or illness at any time during the period of five years preceding the date on which the veteran undergoes the treatment.  In other words, the caregiver is able to take up to 26 weeks of leave to care for a veteran for up to five years after the service member leaves the military service.

The law does not state an effective date for these provisions.  Consequently, it is not yet clear whether these amendments take effect immediately or only after implementing regulations are issued.  However, the amendments most likely take affect upon the President's signature.  

Regulations to reflect the new provisions will be forthcoming but we do not know when.  We suggest you treat the new amendments to be in effect now. 

For your information, attached is a copy of the amendments to the FMLA.  They will make the most sense if you compare them to the current FMLA law which can be found on the Wage and Hour Divisions website at:  http://www.dol.gov/whd/fmla/fmlaAmended.htm  Amendments to your FMLA policies could be made now or you may prefer to wait for regulations to be issued.  If you wait for regulations, however, remember that the changes appear to already be in effect.

 

Congress to Consider Legislation Mandating Paid Sick Days

Earlier this year, I posted on the Health Families Act, an act that would mandate employers provide paid sick days to their employees.  According to this story in the L.A. Times, Congress is set to consider this legislation next week.  

The article does not name the act, but the description in the article is the Health Families Act.  This act was originally introduced by Senator Kennedy, but is appears to have been taken up by Senator Dodd.  According to Thomas (the Library of Congress' web site) the Healthy Families Act is still in committee.  This article may simply mean the Committee will get to the act next week.  This would be the next step in moving the legislation through the Senate.

You should know, that there is an identical bill (H.R. 2460) in the House as well as another bill that is more narrowly tailored to time off for employees with contagious diseases.  

This legislation will require employers to provide one hour of paid sick time for every thirty hours worked.  The paid sick time must be provided to full time and part time employees.  Obviously, for providers that do not already provide this benefit, the cost of employees will go up if this legislation passes.  Increasing the cost of caregivers at a time when Congress is considering massively cutting reimbursement is not a very good idea.  I will try to keep you posted on what happens with this legislation.  

You may recall, that this is the third time this bill has been introduced into Congress and it still has not passed.  It seems much more likely to pass this time, although that is an observation made without any special insight, just looking at party-line numbers and the number of co-sponsors for both bills.  Once more, it is a good idea to start looking at the costs and how this would impact your business so that you can start educating your Congressional representatives.  (You ought to be getting good at this by now.)

Have a great weekend!

More on SEIU's efforts in Illinois

There is an article in today's' Southtown Star about the "union election" of the self-directed care workers in Illinois.  I have posted on this issue previously, but the votes are going to be counted next week.  This article primarily focuses on one parent and her efforts to get more information from the state on the process.  

It also confirms a point I have made on this blog in the past - SEIU and other unions are targeting self-directed care workers for organization, because there is no one to counter them.  According to the article, the third party agencies in Illinois who review time sheets and pay the self-directed care workers were strictly prohibited from saying anything about the unions.  SEIU went so far as to send letters to the third part agencies telling them that they would lose their state contract if they said anything negative about unionization.

Given SEIU's track record of being less than candid during organizing campaigns the lack of a third party to counterbalance SEIU's "promises" is a huge advantage to the union.  These families only hear what the UNion organizers tell them and they have no obligation to be honest.  There is also no one to counterbalance the "high pressure" tactics SEIU is famous for using.

Even in this article, the mother that was interviewed had SEIU organizers show up at her door on a Sunday afternoon. They got her information from the state so that they could visit her at "her place of work."  Really, that is great, talk about privacy.  If you are a self-directed care worker, the unions may get your home address and other contact information from the state.

The point here is this, SEIU targets the self-directed care workers, because it is easy to win an election when you have no one to oppose you and to share the other side of the story.  For example, any promise of increases in pay requires the state to come up with more money.  Given the current economic climate, increased reimbursement rates seem less and less likely.  They easy win then allows the union to collect more dues.  In Illinois, the self-directed workers who voted no to the union will still have to pay the unions dues.  If the rates do not increase, all of the self-directed care workers will actually be worse off than before the union.  (I bet the organizers did not mention that.)

This matters to home health and hospice, because the self-directed care workers are usually the first step in the unions efforts.  Once they get the self-directed care workers, they begin to target the other home care providers.  They use the self-directed care workers as an "example" of what they can do for your employees.  Often, the self-directed care program is a convenient way for SEIU to interject itself into the state provider system.  In Indiana, SIEU has actually bussed in Illinois members to appear at rallies to make it look like they have a lot of members in our state.  Hmm, that is convenient.

As the vote in Illinois unfolds, providers in other states should be watching to see what stories develop.  Often, these stories can be helpful to providers in other states that are at odds with SEIU.  I suspect, we will see stories like that coming out of Illinois as the providers begin to see that they may not have been told the whole story.  Stay tuned.

UPDATE:  Here, from Michelle Malkin, is more on Illinois and feedback regarding SEIU's efforts around the country.  

Reminder about sexual harassment in homecare

Earlier this month a home health agency in Tennessee was sued by the EEOC for allegedly condoning a sexually hostile workplace.  According to the complaint filed by the EEOC, the agency ignored 25 written reports from female employees regarding a single patient.  This patient allegedly harassed the female employees, inappropriately touched the female employees and made inappropriate sexual requests.    

The employer's response to these reports was to continue placing female employees in the patient's home and firing one of the employees when she refused to apologize for reporting the patient's conduct.  In a statement, the EEOC said that "[t]here is no excuse for knowingly and repeatedly subjecting female employees to a sexually hostile and abusive work environment."

I know that some home health, private duty, and hospice providers view the patient's home as their castle and feel that they may not be able to stop a patient from acting a certain way.  The patient may not be willing to change their behavior, but it does not mean you simply shrug your shoulders and continue to send employees to the patient to be harassed.    As an employer, you are required to prevent sexually harassment.  You all have sexual harassment policies and procedures.  These should be followed, even when the harasser is a patient.  You efforts to follow your policies and address the problem should also be documented.  ("If it wasn't documented, it didn't happen", I believe is how the nurses say it.)

When an employee complains to you of sexually harassing behavior by a patient, you must investigate it.  You should then follow-up on your investigation.  If you determine the patient, a patient's family member, or friend is harassing your employee(s), you need to take action to stop it.  This can range from sitting down with the patient and the patient's family to explain the problem and asking them to correct it up to terminating services.  Many patients and/or their families will change their behavior after a letter or a face to face meeting.  If not, you will need to discharge the patient.  Terminating services will usually be the result of the patient's refusal to correct the problem.  When you do have to discharge the patient, you want to be sure to handle it properly to avoid claims of patient abandonment.

This case makes it clear that if you ignore the problem, the EEOC will get involved.   LIke so many other regulatory areas, this is one where compliance and prevention is much much easier than responding to a government investigation and/or law suit.