Sixteen employees of Resurrection Home Health Services submitted overtime complaints to the Illinois Department of Labor. The Department investigated whether the home healthcare clinic workers were exempt from the overtime provisions of the Illinois Minimum Wage Law under the company’s fee-for-visit compensation scheme.

What happened. In February 2002, Resurrection changed its compensation structure to a fee-for-visit method in which employees were paid a fixed sum for a given task no matter how long it took to complete. As a result, their compensation was determined by the number and type of home visits they made.

In any week in which those employees performed any work, they were paid under the fee-for-visit method or paid a guaranteed minimum weekly payment of $300—whichever was greater. The minimum guaranteed pay increased in mid-2004 and then again in mid-2006.

A compliance officer concluded that the employees were professional employees exempt from overtime. Although an administrative law judge agreed that they were bona fide professional employees, she found that the compensation structure was not on a “salary basis” or “fee basis” under the state minimum wage law and incorporated federal regulations. She said the employees were not exempt and were owed overtime wages. A chief administrative law judge affirmed, and the Department concluded that Resurrection owed more than $381,000 to 173 employees.

Resurrection filed suit. The circuit court granted summary judgment to the company, concluding that the workers were paid on a salary basis, because they were guaranteed a minimum weekly payment of $300. The Department appealed.

What the court said. The appeals court reversed, saying the employees are not exempt from overtime requirements. “Resurrection’s guaranteed minimum was not paid each pay period; rather, it was an alternative only when the fees-for-visit were too low. In other words, the guaranteed minimum was not part of the employees’ base pay paid every week.”
 
The court also concluded that a genuine issue of material fact exists regarding whether the employees’ salary meets the “fee basis” test. Resurrection Home Health Services v. Shannon, et al., Illinois Court of Appeals, Fourth Division, No. 1-11-1605 (1/10/13).

Point to remember: Employers of home healthcare workers may have a particularly challenging time complying with overtime laws, since the court said “[t]he issue of whether health care workers’ compensation qualifies for overtime protection has been an issue nationally, with inconsistent results and no clear definitive regulation stating that such workers are either exempt or not exempt.”