Bayada Nurses, Inc. v. Commonwealth of Pennsylvania, 2010 Pa. LEXIS 2585 (Pa. Nov. 17, 2010)

The Pennsylvania Supreme Court holds that a third-party agency employer is not entitled to the domestic services exemption of the Pennsylvania Minimum Wage Act and, therefore, must pay its home health aides overtime.

The Pennsylvania Supreme Court was required to determine whether a third-party agency employer qualifies for the domestic services exemption and, therefore, was exempt from paying its home health aides overtime. Domestic service is defined as "work in a private dwelling for an employer in his capacity as a householder" as distinguished from work in a private dwelling for such an employer in its pursuit of a trade, occupation, profession, enterprise or vocation." There, the Pennsylvania Department of Labor sought to audit the employer's payroll records to determine whether the employer was complying with the Pennsylvania Minimum Wage Act when it failed to pay its home health aides overtime. The Department took the position that the employer was not entitled to the domestic services exemption from overtime requirements. The employer, however, filed a petition with the Commonwealth Court in a complaint for declaratory judgment arguing, among other things, that it is a joint employer of the home health aides and that the aides are "under the total discretion and control of the client while performing services in the client's home." As a result, the employer asserted that it should be permitted to benefit from the overtime exemption. The Pennsylvania Supreme Court, however, rejected the employer's argument. In so holding, the Court expressly noted that "the plain and unambiguous statutory language of the Act sets forth two requirements to come within the domestic services exemption: (1) the worker must be providing domestic services in or about a private home; and (2) the employer must be of a particular capacity, i.e., an employer in whose home the work in being performed." As a result, the Court stated that "the statute focuses on one type of employer— a householder." Since the employer must be a householder to satisfy the exemption from paying overtime wages to an employee—and the employer in this case is not a householder—it cannot benefit from the exemption under the Pennsylvania Minimum Wage Act, regardless of whether a joint-employer relationship can be established.

Case Law Alert - 1st Qtr 2011