Colorado Politics

10th Circuit hands down decision on overtime pay to domestic workers

The U.S. Court of Appeals for the Tenth Circuit on Wednesday ruled against a home healthcare worker who argued that she should have received overtime pay because she was the employee of an outside agency.

Theresa Jordan worked for Maxim Healthcare Services Inc. from 2012 through 2015. The company is a staffing service for in-home healthcare employees. Jordan was a “companion” under federal labor law, and the company did not pay companions time-and-a-half wages for working overtime.

The federal Fair Labor Standards Act, which generally entitles employees to overtime pay, has an exemption for domestic workers who “provide companionship services for individuals who … are unable to care for themselves.” The U.S. Department of Labor has interpreted such services to mean fellowship, care or protection. Third-party employers like Maxim were covered under this exemption.

However, Colorado law provides a similar exemption to “companions, casual babysitters, and domestic employees employed by households or family members” who work in private residences. There is no mention of what standard applies to a third-party employer.

In 2006 and 2012, the Colorado Division of Labor Standards and Statistics sent letters to Maxim confirming that the intent was for the companion exemption on overtime pay to apply in all cases, not just those in which the companion was a direct employee of a household. Jordan filed a class-action lawsuit in federal court in 2015 challenging this interpretation, and the district judge agreed with her reading that third-party employers were not exempt from paying overtime.

Circuit Judge Jerome A. Holmes, writing for the three-judge panel, dissected the district court’s ruling, including an analysis of the punctuation of the Colorado statute.

“To be sure, commas and conjunctions are important,” Holmes wrote. But “the companionship exemption is ambiguous, and the district court erred in concluding otherwise.”

He concluded that all three occupations mentioned in the Colorado statute involve a personal connection to the client, and the Division of Labor intended that to be the standard against which to apply the exemption.

By arguing that workers performing similar tasks should be paid differently for overtime depending on who their employer is, Holmes wrote, Jordan’s position “treats employers in the same occupation or industry (i.e, companionship services) unequally.”

Through examination of the definitions and context of the words written in Colorado law, Holmes determined that the Division of Labor’s intent mattered, not just the literal reading.

“The bottom line is this: since 1998, the Division has consistently interpreted the companionship exemption as applying to companions employed by third-party employers,” the court decided. “Simply put, the Division’s words and actions confirm that it intended the companionship exemption to apply to companions employed by third-party employers.”

The case is Theresa Jordan v. Maxim Healthcare Services, Inc.

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Pattanaphong Khuankaew / iStock
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