Many home health companies classify their registered nurses (“RNs”), physical therapists (“PTs”), occupational therapists (“OTs”), and speech language pathologists (“SLPs”) as professionals exempt from the FLSA’s overtime requirements.

  • One problem with this classification arises from how these clinicians are paid.  To satisfy the professional exemption, an employee must be paid on a salary or fee basis.  29 C.F.R. § 541.300(1).  If a registered nurse is classified as exempt from overtime but is not paid on a salary basis, her classification should be closely considered to see whether her manner of compensation satisfies the alternate “fee basis” requirement.  If it does not, then the nurse is eligible for overtime under the FLSA.
  • The fee basis requirement is described at 29 C.F.R. § 541.605:

“An employee will be considered to be paid on a ‘fee basis’ . . . if the employee is paid an agreed sum for a single job regardless of the time required for its completion.These payments resemble piecework payments with the important distinction that generally a “fee” is paid for the kind of job that is unique rather than for a series of jobs repeated an indefinite number of times and for which payment on an identical basis is made over and over again. Payments based on the number of hours or days worked and not on the accomplishment of a given single task are not considered payments on a fee basis.”

  • In particular, some home health companies pay their RNs on a “per visit basis,” paying them a certain amount for each visit they complete, as opposed to paying either a set salary or a guaranteed minimum salary with bonuses based on the number of visits completed.  For example, a per visit payment plan may work as follows:

A nurse is paid $30 per visit completed; in week 1 she completes 5 visits and is paid $150 for that week, in week 2 she completes 30 visits and is paid $900 for that week.

  • There are at least two potential problems with classifying RNs, PTs, OTs, and SLPs as exempt from overtime but paying them on a per visit basis:

1.   Paying for meetings or non-visit work on an hourly basis or otherwise based on time worked:   Some employers compensate visit-related work on a “per visit” basis but compensate other work nurses complete—such as attending training and meetings or completing office administrative work—on an hourly basis or otherwise explicitly based on how much time the nurse spends doing such work.  This is sometimes called a “hybrid” compensation plan that combines fee and hourly payments, and at least two courts have concluded that they do not satisfy the requirement for exemption.

  • The Sixth Circuit has held that home health nurses are not paid on a fee basis and thus are entitled to overtime if they are paid for visits on a “per visit” basis but for other work, such as meetings, on an hourly basis.  Elwell v. Univ. Hospitals Home Care Servs., 276 F.3d 832, 839 (6th Cir. 2002).
  • The Northern District of Georgia recently came to a similar conclusion, holding that nurses did not satisfy the professional exemption where they were paid for visits on a per visit basis and for meetings and trainings using a duration grid that set payments based on the length of the meeting.  Rindfleisch v. Gentiva Health Servs., Inc., --- F. Supp. 2d ----, 2013 WL 4494375 (N.D. Ga. July 26, 2013)

2.   The visit payments themselves may not satisfy the “fee basis” requirement if they are themselves based on time worked:  For example, if a nurse is paid $30 for visits under 2 hours, and $60 for visits over 2 hours, there is a good argument that the payments do not qualify as “fee basis” payments because they are set based on time worked.

  • The Sixth Circuit stated in Elwell that evidence that the defendant set visit payments based on the amount of time the employer thought a visit should take may present a question of material fact for the jury as to whether “per visit” payments were actually a proxy for hourly compensation and did not satisfy the fee basis test.  Elwell v. Univ. Hospitals Home Care Servs., 276 F.3d 832, 839 n.3 (6th Cir. 2002) (explaining that document showing payment for visits “was based on the hourly rate of $17.65” multiplied by the hours in the workweek and divided by the average number of visits expected to be completed per week was evidence upon a jury may infer that the per visit plan was actually a proxy for hourly payment, but was insufficient to support summary judgment for plaintiff).   
  • Additionally, an RN who is paid on an hourly basis for all work is plainly not paid on a “salary or fee basis,” and so does not satisfy the professional exemption from overtime.
  • The above analysis is limited to registered nurses, physical therapists, occupational therapists, and other clinicians with specialized degrees who might be classified as professionals.  Nursing aides, licenses practical nurses, and other workers in the home health industry without specialized degrees are likely to either be classified by their employer as non-exempt or as exempt under the distinct companionship/domestic service es exemption, which does not include a salary/fee basis requirement.  (The companionship exemption will be substantially limited by new DOL regulations in 2015, which will prohibit home healthcare companies from claiming this exemption.)

If you have questions or feel that you’ve been cheated out of your proper wages contact us at (855) 825-5916.