Prima Facie Law Blog : Labor & Employment Lawyer & Attorney : Epstein Becker & Green Law Firm : ADEA, Discrimination, Title VII

We live in a time of change. Last summer fifteen United States senators wrote an open letter to Secretary of Labor Hilda Solis to urge the U.S. Department of Labor ("DOL") to repeal the Domestic Service exemption from the minimum wage and overtime requirements of the ("FLSA") for home health care workers. Secretary Solis has expressed support for the effort to review this exemption, with a view toward closing this "loophole." Citing a $9 an hour industry-wide average wage, the senators argued in favor of extending federal overtime requirements to "thousands of low-wage workers, primarily women, who are doing difficult, dangerous, yet extremely important work." Furthering public debate on the subject, the New York Times on January 28 ran an editorial in support of eliminating the Domestic Service exemption for home care aides.

The Domestic Service Exemption

Under current federal regulations, home health care aides who assist the elderly and infirm are exempt from the minimum wage and overtime requirements of the FLSA pursuant to 29 U.S.C. Section 213(a)(15) (exempting "any employee employed on a casual basis in domestic service employment to provide babysitting services or any employee employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves (as such terms are defined and delimited by regulations of the Secretary)"). In 2007 the United States Supreme Court upheld the current Department of Labor regulation allowing this exemption against a strong legal challenge from organized labor. Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158 (2007).

The exemption applies to all workers in domestic service who provide companionship services for individuals unable to care for themselves due to either physical or mental infirmity. Domestic service is work performed within the residence of the family using the services. Companionship services are those that provide fellowship, care and protection to the elderly and infirm. 29 C.F.R. § 552.109(a). Home health care workers, whether employed directly by the family or by an employer or agency other than the household using their services, are currently exempt from the FLSA

Some state laws have already narrowed the federal exemption. Pennsylvania, for example, exempts only home health care aides employed directly by a family for work performed within their home, excluding from the exemption workers employed by a placement agency. New York requires the payment of time-and-one-half the minimum wage for overtime hours worked. Wherever a state law provides greater protection to employees than the FLSA, the state law prevails over federal law.

Potential Effects

Eliminating or modifying this federal exemption may increase the burden to working families who want to care for their loved ones at home. A change in the Domestic Service exemption may also have significant consequences for employers who provide home health care workers to families. Employers of home health aids often conduct background checks and provide training to workers before they arrive in the home to offer care for a family’s loved ones. There is an ever present danger that if costs of home care become prohibitive, economics will operate to push the elderly and infirm out of the home into nursing homes, or other institutionalized setting.

We will continue to monitor and post developments on this significant issue.

• Email This
• Print
• Comments
• Trackbacks

In a decision dated January 5, 2010 the D.C. Circuit raised that question in a case involving the administrative exemption in a Fair Labor Standards Act class action.  Jerome Robinson-Smith v. Geico, case number 08-7146, and Christine Lindsay et. al. v. Geico, case number 08-7147, in the U.S. Court of Appeals for the District of Columbia Circuit.

Stating the District Court had no occasion to decide whether the job of a GEICO auto damage adjuster is so easy a caveman could do it, (referring to GEICO’s well known ad campaign in a light hearted footnote) the appellate court held that GEICO satisfied its burden of proof that its employees performed exempt administrative duties. The appellate court reversed the district court’s summary judgment for plaintiffs, and in a lengthy and well reasoned decision, upheld the exempt classification. Reversing the lower court, the appellate court directed judgment be entered for the employer.

Exemptions to the FLSA are generally narrowly construed. The administrative exemption applies only to employees paid on a salary basis of at least $455 a week whose “primary duty consists of …the performance of office or non-manual work directly related to management policies or general business operations of his employer…which includes work requiring the exercise of discretion and independent judgment with respect to matters of significance.” 29 C.F.R. 541.200 et. seq. The court noted the question of whether an employee comes within an FLSA exemption is a question of law, and the appellate court reviewed de novo the district court’s grant of summary judgment to the plaintiffs.

Plaintiffs did not dispute that they were paid the requisite salary and performed non-manual work directly related to GEICO’s business operation. However the plaintiffs argued, and the district court found, that the amount of discretion they exercised was “insufficient” for exemption because the vast majority of their work consisted of using their training and skills to assess the value of the damage to customers’ vehicles in accordance with the employer’s directions, “limited in scope by both the information and standards contained in the computer software and the guidelines and limits on negotiating authority laid out by GEICO”.

The appellate court found that although the parties disputed how much discretion the plaintiffs exercised, there was no dispute that plaintiffs work “includes some discretion” to perform their duties. The court then held that because it was undisputed that the plaintiffs’ job “includes” work requiring the exercise of discretion and independent judgment, the employer had met its burden of proof, and directed the district court to enter judgment for the employer.

The court, citing decisions from “sister” circuits finding auto damage adjusters exempt from overtime requirements by virtue of the administrative exemption, held that the defining regulation merely required the employees’ primary duty to “include” discretion and independent judgment, but does not specify how frequently the discretion must be exercised. The court held that because it was undisputed that the plaintiff exercised “some discretion and independent judgment during the course of his job” the employer had satisfied the final test to support the exempt classification.

What Does This Mean?  

How broadly will the D. C. Circuit’s analysis of the auto damage adjusters’ duties be applied to other employment circumstances?  Because each worker’s classification of exemption depends upon a detailed factual analysis, and employers are required to bear the burden to prove an exemption is applicable, employers should proceed cautiously before reaching a determination that their employees satisfy all the criteria necessary for exemption. The court noted that in this case GEICO had re-classified their auto damage adjusters as non-exempt during the course of the litigation to limit further exposure in the event the exempt classification was not upheld.

As many employers have learned to their sorrow, the question of properly applying FLSA exemptions is not so easy even a cave man could do it.

Douglas Weiner served for many years as Senior Trial Attorney, United States Department of Labor, New York Regional Solicitor’s Office, before joining EpsteinBeckerGreen. He now counsels and defends employers in wage hour matters. 

• Email This
• Print
• Comments
• Trackbacks

In a per curiam decision yesterday by the Eleventh Circuit Court of Appeals in Walters et al. v. American Coach Lines of Miami, Inc. No. 08-15636 (11th Cir. July 23, 2009) (download), the Court affirmed the district court's summary judgment in favor of American Coach Lines of Miami, Inc. (ACLM) with respect to 45 of 63 Plaintiffs who claimed that ACLM had violated the FLSA’s minimum wage and overtime provisions.  ACLM was entitled to summary judgment on the ground that the group of plaintiffs who were reasonably expected to drive airport-to-seaport shuttle routes are exempt from the FLSA by virtue of the Motor Carrier Act (MCA).  

Specifically, the relevant plaintiffs would shuttle cruise ship passengers of Costa Cruises, Princess Cruises, and Royal Caribbean Cruise Lines between the Miami and Fort Lauderdale airports and local hotels and cruise ship ports. In addition, ACLM provided passengers of Royal Caribbean with ground transportation for passengers who booked vacation packages through travel agents or Royal Caribbean as part of their overall cruise package.

The MCA act specifically exempts from the FLSA “any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to the provisions of” the MCA. The Secretary of Transportation has authority under the MCA “to regulate the maximum hours of service of employees who are employed (1) by a common carrier by motor vehicle; (2) engaged in interstate commerce; and (3) whose activities directly affect the safety of operations of such motor vehicles."

The Eleventh Circuit concluded:

". . . ACLM’s airport-to-seaport routes would come under the Secretary’s MCA jurisdiction. Its shuttle trips share a practical continuity of movement with the interstate or international travel of the cruise lines and their passengers . . . For cruise ship passengers arriving at the airport or seaport, ACLM’s shuttle rides would be part of the continuous stream of interstate travel that is their cruise vacation. The Royal Caribbean patrons in particular would have no reason to have any alternate view since the fee for the shuttle ride would either be bundled as part of their cruise vacation package or would be included on the bill for their Royal Caribbean shipboard account. . . . [F]rom the perspective of the cruise passengers, ACLM’s trips were an essential and intrinsic component of the overall stream of interstate travel transporting the passengers from their points of departure to the cruise ships (and exotic foreign and out-of-state ports of call) and back home again."

The Eleventh Circuit's sagacious opinion is an excellent opportunity to refresh your knowledge of the requirements and applicability of the MCA particularly in the context of interstate commerce continuity.  My colleagues, Richard D. Tuschman and Kevin E. Vance, did an admirable job in representing ACLM and handling the complexity of the MCA in this case.   For further analysis of this case and the MCA, the Florida Employment Law Blog is a great source.

• Email This
• Print
• Comments
• Trackbacks

According to the New York State Department of Labor median wage statistics (download), the top five highest paying jobs in New York State are: Physicians/Surgeons ($150,000); Dentists ($138,000); Lawyers ($132,000); Judges, Magistrate Judges and Magistrates ($126,700); and Podiatrists ($123,800).  Four of the five require a professional degree; and even judges and magistrates require education beyond a bachelors degree. (Yes, podiatrists are doctors, too.)

Being a "Learned Professional" also means that you are exempt from the minimum wage and overtime pay requirements of the federal Fair Labor Standards Act (FLSA).

So what does it take to be inducted into the club of Learned Professionals, perhaps the most dignified of all of the FLSA’s exemptions?

To qualify for the Learned Professional Exemption:

• the primary duty must be work that requires advanced knowledge
• in a field of science or learning
• that is customarily acquired by a prolonged course of specialized intellectual instruction.

Under the federal regulations, "work requiring advanced knowledge'' means work which is predominantly intellectual in character, and which includes work requiring the consistent exercise of discretion and judgment, as distinguished from performance of routine mental, manual, mechanical or physical work. Advanced knowledge cannot be attained at the high school level. 

A "field of science or learning'' includes the traditional professions of law, medicine, theology, accounting, actuarial computation, engineering, architecture, teaching, various types of physical, chemical and biological sciences, pharmacy and other similar occupations that have a recognized professional status.  The "mechanical arts" or skilled trades where in some instances the knowledge is of a fairly advanced type are generally not considered fields of science or learning.

The phrase "customarily acquired by a prolonged course of specialized intellectual instruction'' restricts the exemption to professions where specialized academic training is a standard
prerequisite for entrance into the profession. Possession of the appropriate academic degree is the best prima facie evidence that an employee meets this requirement. However, the word "customarily'' may also cover employees who attained the advanced knowledge through a combination of work experience and intellectual instruction. However, the learned professional exemption is not available for occupations that customarily may be performed with only the general knowledge acquired by an academic degree in any field, with knowledge acquired through an apprenticeship, or with training in the performance of routine mental, manual, mechanical or physical processes. The exemption also does not apply to occupations in which most employees have acquired their skill by experience rather than by advanced specialized intellectual instruction.

While the regulations have identified various professions typically included within the exemption (e.g., accountants, chefs, physician assistants et al.), and those excluded (e.g., paralegals, accounting clerks, bookkeepers, cooks et al.), the courts have, of course, varied in their approach to determining whether a particular job constitutes a learned profession.  For example, a California federal court, in Campbell v. Pricewaterhousecoopers, LLP, 602 F. Supp. 2d 1163 (E.D. Cal. 2009) (download), has recently interpreted the California wage orders and labor code to be ambiguous and thus held that accountants must be CPA licensed in order to meet that state's learned professions exemption.  The federal regulations have no such ambiguity, however, and do not have a license requirement for accountants. See 29 C.F.R. § 541.301(e)(5). 

Wisely, the regulations have left the door wide open to the exemption being flexible enough to accommodate the progressively intellectual character of the 21st Century workplace:

The areas in which the professional exemption may be available are expanding. As knowledge is developed, academic training is broadened and specialized degrees are offered in new and diverse fields, thus creating new specialists in particular fields of science or learning. When an advanced specialized degree has become a standard requirement for a particular occupation, that occupation may have acquired the characteristics of a learned profession. Accrediting and certifying organizations . . . also may be created in the future. Such organizations may develop similar specialized curriculums and certification programs which, if a standard requirement for a particular occupation, may indicate that the occupation has acquired the characteristics of a learned profession.

29 C.F.R. § 541.301(f).

Caveat: As the number of computer-related jobs and advanced computer certifications grow, so will the number of issues as to whether the employee is a "Learned Professional" and/or a "Computer Employee" -- a separate and highly technical exemption that deserves to, and will be, addressed separately.  Stay tuned.  

• Email This
• Print
• Comments
• Trackbacks