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FLSA: Ninth Circuit Holds L.A. Homecare Workers are Eligible for Overtime Compensation

On November 4, 2022, a three-judge panel of the United States Court of Appeals for the Ninth Circuit held that for the purposes of the Fair Labor Stands Act (“FLSA”), Los Angeles County (the “County”) qualifies as a joint employer of In-Home Supportive Services (“IHSS”) providers and is therefore liable for failing to pay overtime compensation, partially reversing the Central District of California’s summary judgment order in favor of the Los Angeles County Department of Social Services.

Los Angeles County IHSS provider Trina Ray filed a putative collective action against the County to seek relief for unpaid overtime for the period between January 1, 2015 and February 1, 2016. The district court granted summary judgement to the County, determining that the County did not employ IHSS providers for the purposes of FLSA. The Ninth Circuit panel unanimously reversed the district court’s ruling, finding that the County is a joint employer of IHSS providers under FLSA.

Homecare workers are workers who serve as personal attendants to qualifying people, including individuals who are over the age 65, disabled, or blind. These workers provide a variety of services such as bathing, grocery shopping, and laundry.  In Los Angeles, homecare workers are directly hired and supervised by the individuals receiving services, but the program is partially administered by the County. Historically, homecare workers were excluded from the FLSA’s minimum wage and overtime compensation requirements under an exemption for “companion” workers intended to apply to casual babysitters. In 2013, the Department of Labor issued a new rule to narrow the exception and provide overtime and minimum wage protections to home care workers employed by third parties under the FLSA. The rule was scheduled to take effect on January 1, 2015, but a district court vacated the rule before it was implemented. The D.C. Circuit Court then reversed the district court’s decision, and the state started to pay overtimes wages to IHSS providers pursuant to the ruling on February 1, 2016.

To determine joint employer status, the Ninth Circuit applied the “economic reality” test established in Bonnette v. Cal. Health & Welfare Agency, 704 F.2d 1465 (9th Cir. 1983), a case that considered whether the State of California and its counties are joint employers of IHSS providers. The test employs four factors, including “whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.”

While the Ninth Circuit acknowledged there have been significant changes in the way homecare workers are paid since Bonnette was decided, it determined that Los Angeles County meets enough criteria of the test to merit designation as a joint employer. Specifically, the court found the County exercised economic control over IHSS workers by contributing a substantial amount of funding to the IHSS program. Additionally, the County has the authority to negotiate and set wages for providers and choose the method of payment for workers. The Court further found that the County exercises “considerable control over the nature and structure of the employment relationship,” noting that the County maintains employment records and employee IDs.  Finally, the County serves as the public face of the program by offering orientation sessions and training materials.

Updates will be posted to this blog as the matter progresses. The case caption for this action is Trina Ray et al. v. Los Angeles County Department of Public Social Services et al., No. 20-56245, filed in the United States Court of Appeals for the Ninth Circuit, and Trina Ray v. California Department of Social Services et al., No. 2:17-cv-04239-PA-SK, filed in the United States District Court for the Central District of California.

The legal team at Miller Shah LLP has significant experience representing employment matters. If you have any questions regarding this subject or this post, please contact Chiharu Sekino (cgsekino@millershah.com) or Johanna Richter (jcrichter@millershah.com). The firm can also be reached toll-free at (866) 540-5505.

Miller Shah LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, and Pennsylvania. The firm is an active member of International Advisory Group (IAG Global), which provides clients access to excellent legal and accounting resources around the globe. For more information about the firm, please visit www.millershah.com.

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