ANDERSON v. SOUTHERN HOME CARE SERVICES INC (2015)

In 2013, former employees of two in-home personal care companies sued their former employers, asserting that they had not been paid the minimum wage to which they are entitled under the Georgia Minimum Wage Law (GMWL), OCGA §§ 34–4–1 to 34–4–6. The employers removed the case to a federal district court, which certified two questions to this Court:

1. Is an employee that falls under an FLSA [Fair Labor Standards Act] exemption effectively “covered” by the FLSA for purposes of OCGA § 34–4–3(c) analysis, thereby prohibiting said employee from receiving minimum wage compensation under the GMWL?

2. Is an individual whose employment consists of providing in-home personal support services prohibited from receiving minimum wage compensation under the GMWL pursuant to the “domestic employees” exception articulated in OCGA § 34–4–3(b)(3)?

As explained below, we answer both of these questions no.

1. According to the pleadings, named plaintiffs Margaret Anderson, Mary Dixon, Latasha Williams, and Kyonnie Sutherland (collectively, “the Employees”) are former employees of defendants Southern Home Care Services, Inc. and Res–Care, Inc. (collectively, “the Employers”). Res–Care is a multi-state home care company, and Southern Home Care Services is one of its subsidiaries.¹ The Employees provided in-home personal support services to the Employers' medically home-bound clients, such as bathing, grooming, toileting, transfers, ambulation, and dressing, as well as other services related to the care of the clients, such as washing sheets and dishes. The Employees also performed some general household work for their clients, but as required by the Employers, such work made up no more than 20% of the total services the Employees provided. The Employees often had to drive between different client homes during the workday. They were not permitted to report this time or compensated for the time at an hourly rate.²

On February 15, 2013, the Employees filed a lawsuit against the Employers in DeKalb County Superior Court, seeking to certify a class of similarly situated employees and alleging that the GMWL requires that the Employers pay at least $5.15 per hour for the Employees' unpaid workday travel time. The Employers removed the case to the federal district court for the Northern District of Georgia, invoking diversity jurisdiction. See 28 USC § 1332.³ The Employers then filed a motion for judgment on the pleadings, arguing, among other things, that the Employers are subject to the federal Fair Labor Standards Act (FLSA), 29 USC §§ 201 to 219, and the Employees had not identified any FLSA exception, so the Employers were exempt from the GMWL under OCGA § 34–4–3(c). On March 21, 2014, the district court dismissed the Employees' complaint on this ground, but the court permitted the Employees to file an amended complaint, which they did on April 11, 2014.

The amended complaint includes the allegation that the Employees are exempt from the minimum wage set in the FLSA under the “companionship services” exception, see 29 USC § 213(a)(15), and therefore they are covered by the GMWL. The amended complaint seeks, among other things, recovery of unpaid minimum wages for any class member who worked for the Employers from November 21, 2004 onward, because, under an alleged tolling agreement, these employees have timely GMWL claims. See OCGA § 34–4–6 (requiring claims under the GMWL to be brought within three years of the GMWL violation). The Employers again moved for judgment on the pleadings, arguing first that because the Employers are subject to the FLSA, the Employees are not covered by the GMWL under OCGA § 34–4–3(a), and second that the GMWL does not apply to the Employees because they were “domestic employees” exempted under OCGA § 34–4–3(b)(3). On March 24, 2015, the district court certified the two questions set out above to this Court.⁴

2. The Georgia Minimum Wage Law says:

Except as otherwise provided in this Code section, every employer, whether a person, firm, or corporation, shall pay to all covered employees a minimum wage which shall be not less than $5.15 per hour for each hour worked in the employment of such employer.

OCGA § 34–4–3(a).⁵ The Employees assert that under this provision, they must be paid at least $5.15 per hour for the time they spent on the job traveling from one worksite to another. “Employer” is defined as “any person or entity that employs one or more employees,” OCGA § 34–4–3.1(a)(2), so it is clear that the Employers here are subject to the Georgia statute.

The Employers contend, however, that the Employees come within the exception to the GMWL found in OCGA § 34–4–3(c), which says:

This chapter shall not apply to any employer who is subject to the minimum wage provisions of any act of Congress as to employees covered thereby if such act of Congress provides for a minimum wage which is greater than the minimum wage which is provided for in this Code section.

The Employers argue that this exception applies because the Employees are “covered” by the federal Fair Labor Standards Act, which since July 24, 2007 provided for a greater minimum wage than the GMWL. The FLSA says:

Every employer shall pay to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, wages at the following rates:

(1) except as otherwise provided in this section, not less than

(A) $5.85 an hour, beginning on [July 24, 2007];

(B) $6.55 an hour, beginning [July 24, 2008]; and

(C) $7.25 an hour, beginning [July 24, 2009.]

29 USC § 206(a).⁶

It is undisputed that the Employers, as companies with employees and clients in multiple states, are enterprises engaged in commerce, and thus they are “subject to” the FLSA's minimum wage provisions. See 29 USC § 203(b) (defining commerce to include “trade [or] commerce ․ among the several States or between any State and any place outside thereof”). See also 29 USC § 202(a) (“Congress further finds that the employment of persons in domestic service in households affects commerce.”). That is not, however, all that is required for the GMWL exception to apply. OCGA § 34–4–3(c) looks not only to whether the employer is “subject to the minimum wage provisions of any act of Congress” but also to whether the employees in question are “covered thereby”—thereby referring, like “subject to” does for employers, to “the minimum wage provisions of any act of Congress,” not to any other part of a federal law.

The parties agree, and we assume for purposes of answering the certified questions, that from November 21, 2004 until at least January 1, 2015, the Employees fell under the “companionship services” exemption added to the FLSA in 1974, which exempts from the FLSA's minimum wage and maximum hour protections

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 [of Labor] )[.]

29 USC § 213(a)(15).⁷ During this time period, a federal regulation defined “companionship services” as including “meal preparation, bed making, washing of clothes, and other similar services.” 29 CFR § 552.6 (effective until Jan. 1, 2015). These services could include “general household work” as long as that work did not exceed 20% of the total weekly hours worked. Id. Another regulation defined “domestic service employment” as “services of a household nature performed by an employee in or about a private home ․ of the person by whom he or she is employed. The term includes employees such as ․ nurses ․ [and] caretakers.” 29 CFR § 552.3 (effective until Jan. 1, 2015).

Notwithstanding this definition limiting domestic services to work done at the home of the employer, a third regulation promulgated at the same time expressly applied the statutory exemption for employees providing companionship services to workers employed by third-party agencies like the Employers here, see 29 CFR § 552.109(a) (effective until Jan. 1, 2015)—and in 2007, the U.S. Supreme Court upheld that specific regulation. See Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 168–171, 176, 127 S.Ct. 2339, 168 L.Ed.2d 54 (2007) (holding that the pre–2015 version of 29 CFR § 552.109 was a permissible exercise of agency discretion and applying the FLSA companionship services exemption to a third-party home care employer). Thus, under 29 USC § 213(a)(15) as interpreted in the pre–2015 version of 29 CFR § 552.109, the Employees concededly were not entitled to the minimum wage set by the FLSA during their time working for the Employers.⁸

The Employers argue that even though the Employees fell under this FLSA exemption, they were still “covered” by the FLSA because the Employees were exempt only from the minimum wage and maximum hour requirements of the FLSA, meaning that they were covered by other FLSA provisions. But again, the text of OCGA § 34–4–3(c) does not speak in terms of employees' coverage by the FLSA (or other acts of Congress) in general. Rather, it removes from the GMWL's protection employees who are “covered” by the minimum wage provisions of a federal statute like the FLSA if such act provides for a minimum wage greater than the GMWL's minimum wage. The Georgia exemption is squarely focused on employees who are exempted from the FLSA's minimum wage provisions, like the Employees in this case, and who thus could benefit from a state minimum wage, albeit one lower than the federal one.

The Employers suggest that this application of the plain meaning of OCGA § 34–4–3(c) will produce “absurd” results, because it means that the GMWL also applies to other categories of Georgia employees who are exempt from the FLSA's minimum wage provisions under 29 USC § 213, and in particular the large category of executive, administrative, professional, and teaching employees. See 29 USC § 213(a)(1) (exempting “any employee employed in a bona fide executive, administrative, or professional capacity (including any employee employed in the capacity of academic administrative personnel or teacher in elementary or secondary schools), or in the capacity of outside salesman”).

This absurdity argument, however, fails to recognize that although the GMWL may notionally apply to many employees, the law will not actually affect most of these employees. Simply doing the math, it becomes clear that the minimal guarantee of $5.15 per hour will likely affect few, if any, bona fide executive, administrative, professional, or teaching employees. It is true that employees of this type are generally paid a set salary rather than hourly wages and that many of them frequently exceed the standard 40–hour workweek.⁹ However, even an FLSA-exempt professional working double-time year-round—80 hours a week for all 52 weeks—would have to make less than $21,424 per year to run afoul of the GMWL and therefore trigger its protection. It hardly seems absurd that the General Assembly would want such a minimal level of wage protection for this category of employee.¹⁰

For these reasons, we answer the first certified question no.

3. The Employers argue that even if the Employees were not exempt from the GMWL under OCGA § 34–4–3(c), they were exempt as “domestic employees” under § 34–4–3(b)(2), which says that the GMWL “shall not apply with respect to ․ [a]ny employer of domestic employees.” The Employees respond that they were not “domestic employees” as that term is used in the statute, because they were employed by third-party agencies and did not work in the homes of their employers.

In Long Island Care, the United States Supreme Court noted that the FLSA's references to “domestic service employment” and “companionship services” do not “expressly answer the third-party-employment question.” 551 U.S. at 167–168. The Court therefore concluded that Congress left “the agency to work out the details of these broad definitions.” Id. at 167. That may also be the case with the GMWL's use of the term “domestic employees.” See OCGA § 34–4–2 (“The Commissioner of Labor shall administer and enforce this chapter [the GMWL] and may make rules and regulations for such administration.”). But the Georgia Department of Labor has not by rule provided an interpretation of “domestic employees” as used in the GMWL. Consequently, this Court must apply the most natural and reasonable meaning of the term. See Deal v. Coleman, 294 Ga. 170, 172–173, 751 S.E.2d 337 (2013) (“[W]e must read the statutory text in its most natural and reasonable way, as an ordinary speaker of the English language would.”). Cf. Tibbles v. Teachers Retirement System of Georgia, 297 Ga. 557, 563, 775 S.E.2d 527 (2015) (explaining that a court should defer to an administrative agency only when the legislature has committed the resolution of an ambiguity to the discretion of the agency and the agency has resolved it by a proper and reasonable exercise of that discretion).

Sources providing everyday definitions of domestic employees and employment—including the Wikipedia definition cited to us by the Employers—limit such employment to work done in the home of the employer. See Wikipedia, htt ps:// en.wikipedia.org/wiki/Domestic_worker (defining “domestic worker” as “a person who works within the employer's household”) (last visited Nov. 7, 2015); Mansur G. Abdullah et al., Encyclopedia Britannica, http://www.britannica.com/topic/domestic-service (defining “domestic service” as “the employment of hired workers by private households”) (last updated Oct. 1, 2014).

Moreover, while the Georgia Department of Labor has not issued a rule regarding the GMWL's “domestic employees” exception, the agency has issued a regulation interpreting the similar term “domestic services” used in another employee-protection law—the employment security (unemployment benefits) statute. See, e.g., OCGA § 34–8–35(l) (“The term ‘employment’ shall include domestic service in a private home․”). The regulation explains:

Domestic services include services of a household nature in or about a private home, local college club, or local chapter of a college fraternity or sorority, performed by individuals such as cooks, maids, baby-sitters, handymen, gardeners, and chauffeurs of automobiles for family use. The domestic services must be performed by an individual in or about the private home, local college club or local chapter of a college fraternity or sorority of the person employing the individual.

Ga. Comp. R. & Regs., r. 300–2–3–.10(2)(a) (emphasis added). Under this definition, the Employees here were not providing “domestic services,” because their work was not performed “in or about the private home ․ of the person employing the individual”; they instead worked in the homes of their Employers' clients.¹¹

Similarly, after the FLSA was amended to expand coverage to domestic service employees in 1974, the U.S. Department of Labor promulgated regulations defining work done by domestic employees as work done in the home of their employers. See 40 Fed.Reg. 7404, 7404–7406 (Feb. 20, 1975). As discussed previously, one regulation defined “domestic service employment” as “services of a household nature performed by an employee in or about a private home (permanent or temporary) of the person by whom he or she is employed .” 29 CFR § 552.3 (emphasis added) (effective until Jan. 1, 2015). Another regulation explained that this definition of “domestic service employment” was derived “from ‘the generally accepted meaning’ of the term” as well as longstanding “regulations issued under the Social Security Act.” 29 CFR § 552.101 (effective until Jan. 1, 2015) (citing S. Rep. 93–690, at 20 (1974) (“The term ‘domestic service’ employees is not defined in the [FLSA]. The Committee [on Labor and Public Welfare], however, has referred to the regulations issued under the Social Security Act, and the generally accepted meaning of domestic service relates to services of a household nature performed by an employee in or about a private home of the person by whom he or she is employed.”)). See also 20 CFR § 404.1057(b) (defining “domestic service” as used in the Social Security Act as “work of a household nature done by you in or about a private home.”); 16 Fed.Reg. 13038, 13073 (Dec. 28, 1951) (interpreting the Social Security Act to exclude from “wages” cash paid for “domestic service in a private home of the employer”). The same FLSA regulation reiterated that “[t]he domestic service must be performed in or about the private home of the employer.” 29 CFR § 552.101 (effective until Jan. 1, 2015).¹²

We also note that other states have defined similar terms consistent with our understanding of the meaning of “domestic employees.” See, e.g., Wis. Adm.Code § DWD 272.06(1)(a) (“ ‘Domestic service employment’ means all services related to the care of persons or maintenance of a private household or its premises, on a regular basis, by an employee of a private householder.”); Haw.Rev.Stat. § 387–1 (“ ‘Domestic service’ means services of a household nature performed by an employee in or about a private home (permanent or temporary) of the person by whom he or she is employed .”). Finally, our understanding comports with the way the Employers have apparently viewed a similar term used in the context of Georgia's worker's compensation law. Although OCGA § 34–9–2(a)(2) says that the workers' compensation chapter of the Georgia Code does not apply to “domestic servants,” the pleadings allege that the Employers have paid workers' compensation for employees like the Employees here.

For all these reasons, we hold that “domestic employees” as that term is used in OCGA § 34–4–3(b)(2) must work in or about the homes of their employers, and the Employers are therefore not exempt from the GMWL under that provision. We answer the second certified question no.¹³

Certified questions answered.

NAHMIAS, Justice.

All the Justices concur.