August 21, 2018

August 20, 2018

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DOL Issues Field Assistance Bulletin Providing Guidance on Classification of Home Care, Nurse, or Caregiver Registries Under the FLSA

Last Friday, the Department of Labor (“DOL”) issued Field Assistance Bulletin No. 2018-4to help guide the DOL Wage and Hour Division field staff as to the correct classification of home care, nurse, or caregiver registries under the Fair Labor Standards Act (“FLSA”). This is the most recent piece of guidance on a topic first addressed by the DOL in a 1975 Opinion Letter. The bulletin is noteworthy in two respects. First, it confirms that the DOL continues to view a registry that simply refers caregivers to clients but controls no terms or conditions of the caregiver’s employment activities as outside the purview of the FLSA. Second, and most helpfully, the bulletin provides specific examples of common registry business practices that may establish the existence of an employment relationship under the FLSA.

The following chart summarizes the DOL’s position on a number of common registry business practices, with the caveat that no one factor is dispositive to determining whether a registry is an employer of a caregiver under the FLSA.

  Indicative of Employment Relationship Not Indicative of Employment Relationship

Background

 

Checks

Interviewing the prospective caregiver or the caregiver’s references to evaluate subjective criteria of interest to the registry Performing basic background checks of caregivers (e.g., collecting the caregiver’s criminal history, credit report, licensing, and other credentials)
Hiring and Firing Controlling hiring and firing decisions by, e.g., interviewing or selecting the caregiver or firing the caregiver for failing to meet the standards of the registry or industry Inability to hire or fire employees

Scheduling/

 

Assigning Work

Scheduling and assigning work to specific caregivers (i.e., a subset of qualified caregivers) based on the registry’s own discretion and judgment rather than the client’s Providing client access to vetted caregivers who meet client’s stated criteria; requesting all qualified caregivers contact a particular client if they are interested in working for the client
Scope of Caregiver’s Work Controlling the caregiver’s services/behavior, including but not limited to restricting a caregiver’s ability to work with other referral services or work directly with clients outside the registry Seeking information concerning the type of care needed by the client for matching purposes
Caregiver’s Pay Rate Receiving fees from a client on an on-going basis based on the numbers of hours that a caregiver works for the client or some other arrangement Receiving a one-time referral fee
Fees for Caregiver Services Directly setting the caregiver’s pay rate Communicating general market/typical pay rates or relaying offers/counteroffers to the client
Caregiver Wages Paying the caregiver directly Performing payroll services, provided thatthe client provides funds directly or via an escrow account
Tracking of Caregiver Hours Actively creating and verifying time records Performing payroll services after client/caregiver submits time records

Caregiver Equipment/

 

Supplies

Investing in equipment or supplies for a caregiver or the caregiver’s training or licenses Investing in office space, payroll software, timekeeping systems, and other products to operate a registry business; providing caregivers the option to purchase discounted equipment or supplies from either the registry or a third party
Receipt of EINs or 1099s N/A Requiring an Employment Identification Number or issuing a caregiver an IRS 1099 form

The issuance of this field assistance bulletin indicates a commitment by the DOL to clarify the employment relationship between caregivers and home care, nurse, or caregiver registries, which is a positive development from the perspective of the registries. However, registries should promptly review their business practices, as the Wage and Hour Division, now armed with this guidance, may be more inclined to fight misclassification in this industry.

©2018 Epstein Becker & Green, P.C. All rights reserved.

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About this Author

Jeffrey H. Ruzal, epstein becker green, new york, fair labor, employment
Senior Counsel

JEFFREY H. RUZAL is a Senior Counsel in the Labor and Employment practice, in the New York office of Epstein Becker Green.

Mr. Ruzal's experience includes:

  • Representing employers in employment-related litigation in federal courts and before administrative agencies

  • Representing employers in the defense of putative collective actions under the Fair Labor Standards Act and class actions under the New York State Wage and Hour Law

  • ...
212-351-3762
Carly Baratt, Epstein Becker Law Firm, New York, Health Care, Labor and Employment Litigation Attorney
Associate

Carly Baratt is an Associate in the Employment, Labor & Workforce Management and Litigation & Business Disputes practices, in the New York office of Epstein Becker Green.

Ms. Baratt:

  • Represents clients in employment-related litigation on a broad array of matters, including claims of discrimination, harassment, retaliation, wrongful termination, and breach of employment contract

  • Counsels clients in the health care and financial industries through a range of investigations and enforcement proceedings brought by federal and state agencies, including the U.S. Department of Justice, the Securities and Exchange Commission, the Financial Conduct Authority, the Financial Industry Regulatory Authority, the Commodity Futures Trading Commission, the Office of the Special Inspector General for the Troubled Asset Relief Program, the New York State Department of Financial Services, the New York State Office of the Attorney General, the U.S. Department of Labor, the U.S. Department of Health and Human Services’ Office of Inspector General, and the Federal Transit Administration

  • Represents clients in actions involving residential mortgage-backed securities; securities, accounting, bank, or health care fraud; and violations of the Foreign Corrupt Practices Act

  • Defends clients in False Claims Act and Anti-Kickback Statute cases (including qui tam litigation)

212-351-4674