Labor & Employment Law Daily Wrap Up, WAGE-HOUR—OVERTIME—D. Md.: Home health care provider violated overtime, minimum wage and recordkeeping provisions of FLSA, (Sep 23, 2025)

By Ronald Miller, J.D.

Applying the economic realities test, the court again noted that the employer admitted being able to, and did, hire, fire, and discipline the home health aides, supervised their work, and established the rules regarding compensation, benefits, work schedules, and pay rates.

The Secretary of Labor was granted her motion for summary judgment in a suit brought against a home health care provider alleging violations of overtime, minimum wage, and recordkeeping provisions of the FLSA, ruled a federal district court in Maryland. Here, the court determined that home health aides employed by the employer were employees, not independent contractors. The court granted the Secretary’s motion as to the statutory violations, but made no findings as to willfulness, liquidated damages, and a permanent injunction (Chavez-DeRemer v. Jerry’s Caring Hands, Inc., No. 1:24-cv-00213-JRR. (D. Md. Sept. 19, 2025)).

Home health aides. The employer provides home health care services to the elderly and disabled individuals. The majority of its employees were Home Health Aides who are either licensed Certified Nursing Assistants (CNAs) or unskilled caregivers (usually a family member or loved one of the client). Throughout the relevant time period, the employer employed, on average, 20 to 60 individuals. It contended that this number included employees and independent contractors.

The employer determined how many hours to pay workers for by using clock-in and clock-out data from the State of Maryland ISAS system and its timesheets. However, the employer contended that this was subject to the hours set forth in the applicable Plan of Service.

Throughout the relevant period, the employer did not pay overtime to employees who worked more than 40 hours in a workweek. The employer contended this is because they “pay independent contractors and employees the number of hours approved by the State of Maryland [in] the Plan of Service.” It continued to pay straight time for overtime after the Secretary of Labor instituted the current DOL Wage and Hour investigation and beyond the relevant period.

There were instances where the number of hours for which Defendants paid workers was less than the number of hours actually worked and recorded in ISAS.

According to the Secretary, the undisputed material facts showed that the employer failed to pay employees overtime wages, failed to pay employees a minimum wage of $7.25 an hour for all hours of work, and failed to maintain accurate payroll records. She also urges she is entitled to a finding of willfulness, liquidated damages, and a permanent injunction. The Secretary moved for summary judgment on all claims as well as for findings of willfulness, liquidated damages, and a permanent injunction.

Employer status. As an initial matter, the court examined whether the owner, officer, and manager was an “employer” under the FLSA. “To determine whether the employer-employee relationship exists, courts apply the ‘economic reality’ test.” The economic realities test to determine employer status requires the court to consider: “whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.”

Here, the manager had the ability to hire, fire, and discipline workers, supervised workers, had authority to establish rules for employees, including setting compensation, benefits, work schedules, rates of pay, and methods of payment, set rates of pay and he made decisions regarding recordkeeping of workers’ hours, as well as their payroll and tax records. Moreover, the manager was the sole owner, president and CEO of the employer, and exercised significant control over its operations, including with respect to its workers.

The court determined that the employer’s admissions conclusively established record facts. The admitted facts satisfied all four factors of the applicable test. Accordingly, the Secretary established the manager was an “employer” as a matter of law under the FLSA.

Workers identifies as independent contractors. To determine whether an individual was an independent contractor, the court considered the “totality of the circumstances,” looking to “‘the economic realities of the relationship between the worker and the putative employer’ in deciding whether a particular worker is a covered employee.”

Economic realities test. The economic realities test to determine employee status requires the court to consider: (1) [T]he degree of control that the putative employer has over the manner in which the work is performed; (2) the worker’s opportunities for profit or loss dependent on his managerial skill; (3) the worker’s investment in equipment or material, or his employment of other workers; (4) the degree of skill required for the work; (5) the permanence of the working relationship; and (6) the degree to which the services rendered are an integral part of the putative employer’s business.

Here, the Secretary contended that the home health aides were employees subject to the FLSA. The employer argued to the contrary that the home health aides were “independent contractors” not covered by the FLSA.

Applying the economic realities test, the court again noted that the employer admitted that he was able to, and did, hire, fire, and discipline the home health aides, supervised their work, established the rules regarding compensation, benefits, work schedules, and pay rates for the workers, set rates of pay, and maintained payroll and tax records. Further, certain HHAs offered their Form W-2s, not Form1099s, that identified them as employees. This evidence demonstrated the employer’s significant control over the HHAs.

Opportunities for profit or loss. The employer set the rate of pay for each HHA and determined the number of hours of work for which the workers were paid. Because the employer established the applicable rules governing HHA compensation, work schedules, and pay rates, the evidence did not support a reasonable conclusion that the HHAs’ profits or losses were dependent on their managerial capacities or skills.

Investment in equipment or material. Even assuming that the HHAs may have had occasion to use their own equipment to the extent it is not available at a client’s home, there was no evidence showing the HHAs’ relative investments or employment of others. What the record plainly showed was that the employer established the work policies and payment infrastructure. Here, the undisputed material facts showed “minimal relative investment required of” the HHAs as compared to “the significant capital investments normally made by independent contractors.”

Degree of skill. It appears undisputed that some (if not most) of the workers at issue would not be considered skilled workers. There was no evidence that the specific work at issue here required significant medical care, denoting or requiring such degree of skill. Thus, this factor similarly supported the existence of an employee-employer relationship under the FLSA.

Permanence of working relationship. It was undisputed that the HHAs are able to “work as long as they want to work.” The employer urged that the nature of these positions was inherently project-based as they are tied to a specific client receiving care through the employer. Although the employer’s point was well-taken, the court was not persuaded that that aspect of the HHAs’ employment favored independent contractor status. Accordingly, this factor weighed in favor of an employee-employer relationship under the FLSA.

Services as integral. Finally, the court rejected the employer’s contention that the sixth factor, whether the HHAs’ services were integral to its business, was inapplicable because it served as a staffing agency for government beneficiaries. Rather, the court pointed out that to suggest that the HHAs’ services are not integral to the employer’s work flies in the face of its multiple admissions.

Wage claims. The undisputed facts established that the employer did not pay overtime to employees working over 40 hours in a workweek. It was also undisputed that the employer would pay workers the number of hours allocated in the Plan of Service regardless of how many hours were recorded in ISAS. Based on the evidence, there was no dispute that the employer knew employees were working additional hours (i.e., in excess of 40 hours per workweek) in providing services to clients and the employer did not exercise control to stop that practice.

Accordingly, the Secretary was entitled to judgment as a matter of law that the employer violated Section 6(a) of the FLSA in failing to pay a minimum wage for each hour worked. Moreover, the undisputed facts established that the employer failed to maintain payroll records that included the hours employees worked in a workweek.

The case is No. 1:24-cv-00213-JRR.

Judge: Rubin, J.

Attorneys: Jenna Lynn Jankowski, U.S. Department of Labor, for Lori Chavez-DeRemer. Charles Chukwuweike Iweanoge (The Iweanoges Firm) for Jerry's Caring Hands, Inc. and Ebere Ogbonnah.

Companies: Jerry's Caring Hands, Inc.

Cases: WageHour Overtime MinimumWage RemediesDamages MarylandNews