Higgins v. Bayada Home Health Care, Inc.

Filing 174

MEMORANDUM (Order to follow as separate docket entry) re 172 MOTION For Oral Argument re 157 MOTION for Summary Judgment filed by Bayada Home Health Care, Inc., 157 MOTION for Summary Judgment filed by Bayada Home Health Care, Inc. Signed by Honorable Jennifer P. Wilson on 9/22/2021. (ve)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
STEPHANIE HIGGINS, for herself and :
all others similarly situated, et al.,
:
:
Plaintiffs,
:
:
v.
:
:
BAYADA HOME HEALTH CARE,
:
INC.,
:
:
Defendant.
:

Civil No. 3:16-CV-02382

Judge Jennifer P. Wilson

MEMORANDUM
This is an alleged unpaid overtime wages case brought by Plaintiff Stephanie
Higgins (“Higgins”), on behalf of herself and all others similarly situated, who was
formerly employed as a registered nurse by Defendant Bayada Home Health Care,
Inc. (“Bayada”). Higgins alleges that, inter alia, she was not paid overtime wages
to which she was otherwise entitled in violation of the Fair Labor Standards Act
(“FLSA”) and the Pennsylvania Minimum Wage Act (“PMWA”). Currently
before the court are Bayada’s motion for summary judgment and uncontested
motion for oral argument on the motion.1 (Docs. 157, 172.) For the reasons that
follow, Bayada’s motion for summary judgment will be granted.

1

The court does not see a need for oral argument in this case in light of the comprehensive and
helpful briefing already completed on the motion. The motion for oral argument will therefore
be denied. (Doc. 172.)
1

PROCEDURAL AND FACTUAL BACKGROUND 2
Higgins initiated this action by filing a collective and class action complaint
against Bayada on behalf of herself and all others similarly situated on November
30, 2016. (Doc. 1.) On May 11, 2018, the court granted Higgins’ motion for
conditional certification and notice under 29 U.S.C. § 216(b), giving FLSA
collective members 75 days from the notice mailing date to opt-in to this
litigation. 3 (Doc. 61.) On October 11, 2018, Higgins sought leave to amend the
complaint to add additional named Plaintiffs and assert state law Rule 23 class
claims under the overtime laws of New Jersey, Massachusetts, Maryland,
Colorado, Arizona, and North Carolina. (Docs. 82, 83.) On December 2, 2019,
the court granted Higgins’ motion to amend. (Docs. 130, 131.) That same day,
Higgins filed an amended complaint which included additional named Plaintiffs,
Meghan Taneyhill, Shiela Levesque, Margaret Magee, Sherri Kramer, Shelly Neal,
and Yvette Marshall (collectively, “Plaintiffs”), and six state law minimum wage
claims in states where Bayada operates. (Doc. 132.) Thereafter, Bayada timely

2

In considering Bayada’s motion for summary judgment, the court relied on the uncontested
facts, or where the fact were disputed, viewed the facts and deduced all reasonable inferences
therefrom in the light most favorable to Higgins as the nonmoving party in accordance with the
relevant standard for deciding a motion for summary judgment. See Doe v. C.A.R.S. Prot. Plus,
Inc., 527 F.3d 358, 362 (3d Cir. 2008).
3

This time period has expired and the members of the FLSA collective are established and final.
2

filed an answer to the amended complaint. (Doc. 133.) On December 3, 2019, this
matter was reassigned to the undersigned.
On January 28, 2020, Bayada requested leave to file an early motion for
summary judgment, which was granted by the court on May 15, 2020. (Docs. 137,
148.) Bayada filed the instant motion for summary judgment on September 25,
2020. 4 (Doc. 157.) Higgins filed a brief in opposition, an answer to Defendants’
statement of facts, and an additional statement of material facts. 5 (Docs. 165, 166.)
Bayada timely filed a reply brief. (Doc. 169.) In addition, Bayada filed an
unopposed motion for oral argument on the motion for summary judgment. 6 (Doc.
172.) Thus, the motion for summary judgment is now ripe for review.
The material facts in this case are not in dispute. Plaintiffs are former
“clinicians” employed by Bayada, consisting of “Registered Nurses, Physical
Therapists, Occupational Therapists, Speech Language Pathologists, and Medical
Social Workers.” (Doc. 165, ¶ 4.) Bayada is a non-profit company that provides a
range of clinical care and support services for patients within their homes. (Id.

4

Bayada seeks summary judgment with respect to Higgins’ claims in their entirety and seeks
judgment as a matter of law that its compensation structure does not violate the FLSA. (See
Doc. 157.)
5

The court notes that Higgins’ statement of material facts is not permitted under the local rules,
and that Bayada has objected to the inclusion of this statement in the record. (See Doc. 165,
pp. 62−73; see also Doc. 171.) The court disregards this portion of Higgins’ filing.
6

As discussed above, the court does not perceive a need for oral argument on this motion in light
of the thorough and helpful briefs which have already been submitted.
3

¶ 1.) Higgins represents a conditionally certified class of Plaintiffs who allege that
Bayada illegally classified clinicians as overtime exempt under the FLSA, and
improperly denied them overtime pay. (Id. ¶¶ 2−3.) The other named Plaintiffs
represent putative classes under numerous related state laws based on the same
claims. (Doc. 132, ¶¶ 1, 3.)
Bayada’s compensation structure for its clinicians is set forth in a written
policy entitled “37-2278 Employment Tracks, Compensation and Benefits for
Home Health Field Employees” which is applicable to clinicians nationwide.
(Doc. 159-2; Doc. 165-3, p. 13.) 7 This policy states that Bayada “offers four tracks
of employment with corresponding compensation and benefits” to its clinicians.
(Doc. 159-2, p. 2.) These tracks include guaranteed full-time, guaranteed part-time
with benefits, guaranteed part-time, and per diem. 8 (Id. at 3.) Each employee,
with the exception of those on the per diem track, is assigned a “productivity
minimum” per week; in other words, a set number of productivity points expected
to be performed in a week. (Id. at 3−4.) Employees could request an increase or
decrease in their productivity point expectation that would be accompanied by a
corresponding increase or decrease in pay. (See, e.g., Doc. 159-1, p. 5; Doc. 165,
¶¶ 55−56.)
7

For ease of reference, the court utilizes the page numbers from the CM/ECF header.

8

The per diem track is not at issue in this case.
4

According to the policy, each various task that an employee performs
equates to a point value. (Doc. 159-2, p. 2.) For instance, “a routine visit is
assigned one point; a start of care visit is assigned more than one point.” (Id.) One
point is roughly equivalent to 1.33 hours of work. (Doc. 165-21, p. 8.) Employees
had the opportunity to make up lost or deficient point balances throughout the
week by performing office work or additional home visits based on what worked
best for their schedule. (See Doc. 159-16.) For employment tracks eligible for
paid time off (“PTO”), the amount of PTO an employee may earn is tied to the
amount of productivity points earned during the week. 9 (Doc. 159-2, pp. 3−8.)
Employees could accrue PTO on a weekly basis totaling up to four weeks per year,
less any “no pay” units taken.10 (Doc. 165, ¶ 13.)
In the event that an employee fell below their weekly point expectation,
Bayada would draw from the employee’s available PTO to supplement the
difference between the points they were expected to earn and the points they
actually earned. (See Doc. 159-16.) However, in the event that the employee did
not have any remaining PTO, or the point shortage was due to a lack of available
work, the employee would still receive their guaranteed salary. (Doc. 159-16, p. 2;

9

Per diem track employees are the only track ineligible for PTO.

10

The specific formula for PTO accrual, as set forth in the policy is: “(productivity minimum
times 1.33) less “no pay” units) times (.0769 per unit).” (Doc. 159-2, pp. 3−8.)
5

Doc. 165-3, p. 19; Doc. 165-21, p. 14.) In contrast, if an employee earned more
points than their expected points per week, the employee would earn additional
compensation above his or her guaranteed salary. (Doc. 165, ¶ 13.) PTO
deductions, if applicable, could occur regardless of the number of hours the
clinician worked per week; in other words, a clinician could work more than 40
hours in a given week and still be subject to a PTO deduction for failing to meet
his or her productivity point expectation. (See Doc. 159-7; Doc. 159-8; Doc.
159-9; Doc. 159-13; Doc. 159-14; Doc. 159-17; Doc. 159-19; Doc. 159-21; Doc.
159-24.) If this occurred, Bayada encouraged counseling and individual
assessment to find ways to make the clinician more efficient so they would meet
their weekly productivity point expectation. (Doc. 165-3, p. 20; Doc. 165-21,
pp. 14−15.)
For employees who did not have available PTO but nevertheless wished to
have time off, Bayada maintained a policy entitled “Day No Pay Payroll
Procedures.” (See Doc. 170-1.) This policy states that days without pay “are for
use on a limited basis” for guaranteed employees who have used all of their
available PTO and are unable to work an entire day. (Id. at 2.) In addition, the
policy provides that “[a]s a salaried worker, if the employee works any part of a
regularly scheduled day, the employee needs to be paid for the day.” (Id.) In other
words, if an employee only works a partial day, or even completes a single task

6

before taking the rest of the day off, the employee must be paid their guaranteed
salary for that day. Clinicians are paid on a weekly basis, and each week, members
of Bayada’s accounting department review clinicians’ payroll to detect any
potential errors, including a possible misuse of a day no pay transaction. (Id.
¶¶ 24−26.)
Plaintiffs, including Higgins, always received their guaranteed salary in
accordance with Bayada’s policies. Indeed, the only deductions from Plaintiffs’
guaranteed pay occurred in instances where the Plaintiff elected to take one or
more entire days off when they did not have PTO available. (See Doc. 159-7; Doc.
159-8; Doc. 159-9; Doc. 159-13; Doc. 159-14; Doc. 159-17; Doc. 159-19; Doc.
159-21; Doc. 159-24; Doc. 165-3, pp. 18−19; Doc. 165-21, pp. 12, 14.) At no
point was Plaintiffs’ weekly guaranteed compensation reduced unless they took a
full day off and did not have any available PTO to cover their absence. (Id.)
A. Named Plaintiff Stephanie Higgins
Higgins worked as a full-time employee for Bayada from September 2012
until September 2016. (Doc. 165, ¶¶ 40, 45.) When she first started working for
Bayada, she had a 30-point weekly productivity expectation, which was eventually
reduced to 25 points at her request. (Id. ¶¶ 55−56.) She testified that in most
weeks, she had enough visits to meet her productivity point requirement, but that
there were likely instances in which she fell below the point expectation. (Id.
7

¶¶ 61−62.) Higgins understood that if she did not meet her productivity point
expectation for the week, her PTO would be used to supplement as needed, but that
if she were low on points, she could perform other tasks to make up points. (Id.
¶¶ 65−66, 83, 86.) Higgins testified that she believed her weekly compensation
would be reduced if she fell below her point expectation and did not have
sufficient PTO to make up the points, but she admitted that she did not recall
anyone advising her that this would happen. (Id. ¶ 71.) However, Higgins never
exhausted her available PTO, and her weekly guaranteed compensation remained
constant except for weeks in which she earned more points than required and
received additional compensation. (Id. ¶¶ 67−69, 80; see also Doc. 159-7; Doc.
159-8; Doc. 159-9.)
B. Opt-In Plaintiff Judith Groop
Judith Groop worked as a full-time registered nurse for Bayada from August
2016 through July 2017. (Doc. 165, ¶¶ 90, 92.) Groop received guaranteed
compensation of $1,200 per week and had a 25-point weekly productivity
expectation. (Id. ¶ 93.) During her tenure, Groop received her guaranteed weekly
compensation for every week except three. (Id. ¶ 97; see also Doc. 159-13; Doc.
159-14.) The first of these three weeks, Groop had begun her employment midweek, and did not work the first two days; therefore, she was only paid for the
three days she worked. (Doc. 165, ¶ 97.) The second of these weeks, Groop took
8

a week-long vacation for which she did not have sufficient PTO to cover her time
off. (Id.) She was accordingly paid based on the PTO available to cover full days,
and unpaid for the remaining time. (Id.) For the last of these three weeks, Groop
took a day off for which she did not have sufficient PTO to cover her full-day
absence, and was not paid for this one day of the week. (Id.) There is no evidence
that her guaranteed compensation was reduced simply because she fell below her
expected weekly productivity points and did not have available PTO. (Doc.
159-13; Doc. 159-14.)
C. Opt-In Plaintiff Alicia Heisey
Alicia Heisey worked for Bayada as a registered nurse from May through
August 2017. (Doc. 165, ¶ 102.) Heisey’s offer letter, dated March 31, 2017,
indicated that she would be paid a “minimum weekly salary of $1,125.00” at a rate
of $45.00 per productivity point, and that she could earn additional points for
which she would receive additional compensation at this rate. (Id. ¶¶ 104−105; see
also Doc. 159-16.) Her offer letter also conveyed that if she fell below her
expected point minimum, she would be able to make up points elsewhere, but that
if she did not, her PTO bank would make up the difference. (Doc. 165, ¶ 106.) In
any event, the letter states that she would not be required to use PTO if there were
no cases available to her. (Id.) Heisey testified that she received her weekly
guaranteed compensation each week that she worked for Bayada other than one in

9

which she did not perform any work on a single day and did not have sufficient
PTO to cover her absence. (Id. ¶¶ 108−109; see also Doc. 159-17.) There is no
evidence that her guaranteed compensation was reduced simply because she fell
below her expected weekly productivity points and did not have available PTO.
(Doc. 159-17.)
D. Opt-In Plaintiff Christine DeGrazia
Christine DeGrazia worked for Bayada as a registered nurse from December
2013 through June 2017. (Doc. 165, ¶ 112.) During the time period relevant to
this case, DeGrazia received weekly guaranteed compensation of at least $936.
(Id. ¶ 115; see also Doc. 159-19.) However, DeGrazia testified that she usually
earned more than this amount because she often earned more points than her
weekly expectation. (Doc. 165, ¶¶ 116−117.) In no event did she recall her pay
ever being reduced and there is no evidence that her guaranteed compensation was
reduced because she fell below her expected weekly productivity points and did
not have available PTO. (Id. ¶ 116; Doc. 159-19.)
E. Opt-In Plaintiff Bernadette Salopek
Bernadette Salopek worked for Bayada as a registered nurse from August
2008 through May 2017. (Doc. 165, ¶ 118.) During the time period relevant to
this case, Salopek received weekly guaranteed compensation of at least $1,194.48.
(Id. ¶ 122; see also Doc. 159-21.) From November 2016 through May 1, 2017, she

10

took a leave of absence for which she was not paid. (Doc. 165, ¶ 119.) Upon
return to work, Salopek was paid as a per diem employee, although she had no
independent recollection of being on per diem status. (Id. ¶ 123.) There is no
evidence that her guaranteed weekly compensation as a full-time employee was
ever reduced because she fell below her expected weekly productivity points and
did not have available PTO. (Doc. 159-12.)
F. Opt-In Plaintiff Harold Beardsley
Harold Beardsley worked for Bayada as a nurse for somewhere between 6
and 12 months from 2017 until 2018. (Doc. 165, ¶ 124.) Beardsley received
weekly guaranteed compensation of at least $1,410. (Id. ¶ 127; see also Doc.
159-24.) Beardsley testified that he did not recall any instances where his weekly
compensation was reduced for failure to satisfy his point expectation, but that
Bayada would instead draw from his PTO. (Doc. 165, ¶ 128.) There is no
evidence that his guaranteed compensation was reduced simply because he fell
below his expected weekly productivity points and did not have available PTO.
(Doc. 159-24.)
JURISDICTION
Higgins alleges violations of the FLSA and various state wage laws. (See
Doc. 1.) Pursuant to 28 U.S.C. §§ 1331 and 1367, the court has jurisdiction over
these claims because they arise under the laws of the United States and because the

11

court has supplemental jurisdiction over the corresponding state law claims. The
Middle District of Pennsylvania is the proper venue for this matter because all the
events giving rise to Higgins’ claims occurred in this judicial district.
STANDARD OF REVIEW
A court may grant a motion for summary judgment when “there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). A dispute of fact is material if resolution of
the dispute “might affect the outcome of the suit under the governing law.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Summary judgment is
not precluded by “[f]actual disputes that are irrelevant or unnecessary.” Id. “A
dispute is genuine if a reasonable trier-of-fact could find in favor of the
nonmovant’ and ‘material if it could affect the outcome of the case.” Thomas v.
Tice, 943 F.3d 145, 149 (3d Cir. 2019) (quoting Lichtenstein v. Univ. of Pittsburgh
Med. Ctr., 691 F.3d 294, 300 (3d Cir. 2012)).
In reviewing a motion for summary judgment, the court must view the facts
in the light most favorable to the non-moving party and draw all reasonable
inferences in that party’s favor. Jutrowski v. Twp. of Riverdale, 904 F.3d 280, 288
(3d Cir. 2018) (citing Scheidemantle v. Slippery Rock Univ. State Sys. of Higher
Educ., 470 F.3d 535, 538 (3d Cir. 2006)). The court may not “weigh the evidence”
or “determine the truth of the matter.” Anderson, 477 U.S. at 249. Instead, the

12

court’s role in reviewing the facts of the case is “to determine whether there is a
genuine issue for trial.” Id.
The party moving for summary judgment “bears the initial responsibility of
informing the district court of the basis for its motion, and identifying those
portions of ‘the pleadings, depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any,’ which it believes demonstrate the
absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986) (quoting Fed. R. Civ. P. 56(c)). The non-moving party must then
oppose the motion, and in doing so “‘may not rest upon the mere allegations or
denials of [its] pleadings’ but, instead, ‘must set forth specific facts showing that
there is a genuine issue for trial. Bare assertions, conclusory allegations, or
suspicions will not suffice.’” Jutrowski, 904 F.3d at 288–89 (quoting D.E. v. Cent.
Dauphin Sch. Dist., 765 F.3d 260, 268–69 (3d Cir. 2014)).
Summary judgment is appropriate where the non-moving party “fails to
make a showing sufficient to establish the existence of an element essential to that
party’s case, and on which that party will bear the burden of proof at trial.”
Celotex, 477 U.S. at 322. “The mere existence of a scintilla of evidence in support
of the plaintiff’s position will be insufficient; there must be evidence on which the
jury could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252. “Where
the record taken as a whole could not lead a rational trier of fact to find for the

13

non-moving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co.,
Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
DISCUSSION
As explained above, the parties do not dispute the material facts regarding
Bayada’s compensation structure. Bayada argues that its compensation structure is
valid as a matter of law under the FLSA. Specifically, Bayada seeks summary
judgment regarding a central issue in this case: “Whether Bayada’s compensation
structure—which provides clinicians with a weekly guaranteed salary and the
ability to earn additional compensation for work in excess of their expected
productivity—satisfies the ‘salary basis’ requirement under the FLSA and the
PMWA where the clinicians’ accrued PTO is used in limited circumstances to
offset expected productivity shortfalls, but where the clinicians’ weekly guaranteed
salary, when combined with such PTO, is not in fact reduced in workweeks with
productivity shortfalls.” (Doc. 162, p. 11 (cleaned up).) Bayada argues that
because no court has found this “salary plus” compensation structure to violate the
law, and because Bayada appropriately and equally applied this structure to its
clinicians, Plaintiffs cannot demonstrate that summary judgment is inappropriate in
this case. (Id. at 12.)
Plaintiffs contend that Bayada has gone to great lengths to disguise its
compensation structure as a salary, when in fact every task that a clinician

14

performs is measured by some point value assigned by Bayada corresponding to
the amount of time that Bayada believes the task should take. (Doc. 166, pp. 6−7.)
When a clinician earns more points than their expectation for the week, they are
paid more; when a clinician earns fewer points than their expectation for the week,
they are paid less than their guaranteed salary and their PTO is reduced to make up
the difference. (Id. at 7.) Plaintiffs contend that forcing clinicians to “pay back”
their earned PTO for failing to satisfy the arbitrary metrics assigned by Bayada is
inconsistent with a salaried employee’s payment scheme. (Id.) Accordingly,
Plaintiffs claim that Bayada has not met its burden to prove that a claimed
exemption applies to the clinicians. (Id.)
The court will address these arguments in turn.
A. The FLSA Framework11
Under the FLSA, employers are generally obligated to pay employees a
minimum of one and a half times their rate of pay for all hours worked in excess of
forty hours per week. 29 U.S.C. § 207(a)(1) (2003) (“No employer shall employ
any of his employees . . . for a workweek longer than forty hours unless such
employee receives compensation for his employment in excess of the hours above
11

Bayada asserts that “‘the relevant provisions of the FLSA and the [P]MWA are identical,’
which means that the same analysis as under the FLSA applies equally to the PMWA.” (Doc.
162, p. 45 (citing Mudgett v. Univ. of Pittsburgh Med. Ctr., No. 09-254, 2010 U.S. Dist. LEXIS
44266, at *8 n.4 (W.D. Pa. May 6, 2010)). Higgins has not contested this assertion, and the court
accordingly only sets forth the standards under the FLSA with the understanding that these
provisions apply equally to Higgins’ claims under the PMWA.
15

specified at a rate of not less than one and one-half times the regular rate at which
he is employed.”). There are, however, certain exemptions from the FLSA’s
overtime pay requirement. Specifically, employees do not have to be paid for
hours worked over forty in a week if they are “employed in a bona fide executive,
administrative, or professional capacity.” 29 U.S.C. § 213(a)(1) (2003).
The FLSA grants authority to define the term “professional” to the Secretary
of Labor who has issued regulations that define and interpret § 213(a)(1). These
regulations have the binding effect of law. See Auer v. Robbins, 519 U.S. 452, 458
(1997) (holding that the FLSA grants the Secretary broad authority to define and
delimit scope of FLSA exemptions); see generally Batterton v. Francis, 432 U.S.
416, 425 n.9 (1977) (holding that regulations issued by administrative agency
pursuant to grant of statutory authority have force and effect of law). To show that
an employee is an exempt “professional employee,” an employer must demonstrate
that an employee earns at least $455 per week (as of the time period at issue in this
lawsuit) and meets both a “duties” test and a “salary basis” test.12 29 C.F.R.
§ 541.600.
Thus, to succeed on their claims for overtime pay, Plaintiffs must show that
their duties did not comport with the FLSA’s definition of a bona fide

12

The PMWA mirrored the federal regulations, requiring that exempt professionals be paid on a
“salary or fee basis at a rate not less than $250 per week.” 34 PA. CODE § 231.84(5).
16

“professional” employee, or that Bayada’s compensation scheme treated them as
hourly, rather than salaried, workers. In contrast, to avoid paying Plaintiffs
overtime, Bayada must prove both that Plaintiffs’ duties were professional and that
they were paid a salary in accordance with the regulations’ definitions. The parties
do not dispute that Plaintiffs received at least $455 per week or that the nature of
Plaintiffs’ job responsibilities as clinicians meets the applicable standard for
professional duties as work “[r]equiring knowledge of an advanced type in a field
of science or learning customarily acquired by a prolonged course of specialized
intellectual instruction; or . . . [r]equiring invention, imagination, originality or
talent in a recognized field of artistic or creative endeavor.” 29 C.F.R.
§§ 541.300(a)(2), 541.600. However, Plaintiffs do dispute that they were paid on a
salary basis. Thus, the court turns to the salary basis test.
B. Salary Basis Test
The salary basis test is meant “to distinguish ‘true’ executive, administrative,
or professional employees from non-exempt employees, i.e., employees who may
be disciplined by ‘piecemeal deductions from . . . pay.’” Yourman v. Giuliani, 229
F.3d 124, 130 (2d Cir. 2000) (quoting Auer v. Robbins, 519 U.S. 452, 456 (1997)).
As the Court of Appeals for the Third Circuit has explained generally:
Salary is a mark of executive status because the salaried employee must
decide for himself the number of hours to devote to a particular task.
In other words, the salaried employee decides for himself how much a
particular task is worth, measured in the number of hours he devotes to
17

it. With regards to hourly employees, it is the employer who decides
the worth of a particular task, when he determines the amount to pay
the employee performing it.
Brock v. Claridge Hotel & Casino, 846 F.2d 180, 184 (3d Cir. 1988)).
Pursuant to regulation, the salary basis test states that:
An employee will be considered to be paid on a “salary basis” within
the meaning of this part if the employee regularly receives each pay
period on a weekly, or less frequent basis, a predetermined amount
constituting all or part of the employee’s compensation, which amount
is not subject to reduction because of variations in the quality or
quantity of the work performed.
Subject to the exceptions provided in paragraph (b) of this section, an
employee must receive the full salary for any week in which the
employee performs any work without regard to the number of days or
hours worked. Exempt employees need not be paid for any workweek
in which they perform no work.
An employee is not paid on a salary basis if deductions from the
employee’s predetermined compensation are made for absences
occasioned by the employer or by the operating requirements of the
business. If the employee is ready, willing and able to work, deductions
may not be made for time when work is not available.
29 C.F.R. § 541.602(a)(1)−(2).
Paragraph (b) delineates specific exceptions to the “prohibition against
deductions from pay in the salary basis requirement,” including that “[d]eductions
from pay may be made when an exempt employee is absent from work for one or
more full days for personal reasons, other than sickness or disability.” 29 C.F.R.
§ 541.602(b)(1). The regulation provides the following example:

18

[I]f an employee is absent for two full days to handle personal affairs,
the employee’s salaried status will not be affected if deductions are
made from the salary for two full-day absences. However, if an exempt
employee is absent for one and a half days for personal reasons, the
employer can deduct only for the one full-day absence.
Id.
The regulations also provide a consequence for employers who make
improper deductions from employees’ salaries:
An employer who makes improper deductions from salary shall lose
the exemption if the facts demonstrate that the employer did not intend
to pay employees on a salary basis. An actual practice of making
improper deductions demonstrates that the employer did not
intend to pay employees on a salary basis. The factors to consider
when determining whether an employer has an actual practice of
making improper deductions include, but are not limited to: the number
of improper deductions, particularly as compared to the number of
employee infractions warranting discipline; the time period during
which the employer made improper deductions; the number and
geographic location of employees whose salary was improperly
reduced; the number and geographic location of managers responsible
for taking the improper deductions; and whether the employer has a
clearly communicated policy permitting or prohibiting improper
deductions.
29 C.F.R. § 541.603(a) (emphasis added). This regulation marked a departure
from existing Supreme Court precedent in Auer v. Robbins, 519 U.S. 452, 459−61
(1997). Under the Auer standard, an employer could not claim the salary basis
exemption “if there is either an actual practice of making . . . deductions [based on
variations in quality or quantity of work performed] or an employment policy that
creates a ‘significant likelihood’ of such deductions.” Id. at 461 (emphasis added).

19

The current regulations specify that an actual practice of making improper
deductions is required and omit Auer’s conclusion that a “significant likelihood” of
deductions violates the salary basis test. See Escribano v. Travis Cty., 947 F.3d
265, 274 (5th Cir. 2020); Orton v. Johnny’s Lunch Franchise, LLC, 668 F.3d 843,
847−48 (6th Cir. 2012) (citing Baden-Winterwood v. Life Time Fitness, 566 F.3d
618 (6th Cir. 2009)).
C.

Bayada’s Compensation Structure Does Not Violate the FLSA.

The dispute in this case centers on whether Bayada’s practice of deducting
PTO from clinicians’ leave banks when they do not meet their weekly productivity
point expectation constitutes an improper deduction which would cause Bayada to
lose the professional employee exemption for its clinicians.
The court notes that the Third Circuit has not had the opportunity to consider
this issue. However, courts that have considered this issue have found that fringe
benefits, such as PTO, to which employees are not otherwise entitled, are separate
and distinct from an employees’ salary. McBride v. Peak Wellness Ctr., Inc., 688
F.3d 698, 705−06 (10th Cir. 2012) (holding that the prohibition against pay
docking for an employee working less than an 8 hour day “does not extend to nonmonetary compensation such as vacation time or sick leave”); Paul v. UPMC
Health Sys., No. 06-1565, 2009 U.S. Dist. LEXIS 19277, at *26 (W.D. Pa. Mar.
10, 2009) (noting that there is “a distinction between deductions from base-pay

20

salary and deductions from fringe benefits”) (citations omitted); Wolfslayer v.
IKON Office Solutions, Inc., No. 03-6709, 2004 U.S. Dist. LEXIS 22625, at *20
(E.D. Pa. Nov. 8, 2004) (holding that “‘compensation’ and ‘amount’ in 29 C.F.R.
§ 541.118(a) refer only to base pay salary, which is distinct from fringe benefits
like sick or vacation time”); Caperci v. Rite Aid Corp., 43 F. Supp. 2d 83, 92−93
(D. Mass. 1998) 13 (finding that “as long as at least a portion of the employee’s
compensation is a predetermined amount that is paid weekly or less frequently and
is not subject to reduction, the employee will be paid on a salary basis even if the
employee is also eligible to receive other forms of compensation that are subject to
reduction”); Aiken v. County of Hampton, S.C., 977 F. Supp. 390, 397 (D.S.C.
1997) (“Accrued leave and holiday pay are not a part of the predetermined pay
Plaintiffs receive each workweek. Rather, they are fringe benefits Plaintiffs receive
and their reduction is not equivalent to a reduction in pay. A reduction in paid
leave time does not affect an employee’s status as a salaried employee.”); Barner
v. City of Novato, 17 F.3d 1256, 1261−62 (9th Cir. 1994) (“Thus a reduction in the
paid leave time does not affect the Plaintiffs’ status as salaried employees.”); York
v. City of Wichita Falls, Tex., 944 F.2d 236, 242 (5th Cir. 1991) (deductions from
“sick or vacation leave on an hourly basis . . . do not establish that a person is paid

13

The court is cognizant of the fact that this case and the ones that follow were decided before
the Department of Labor (“DOL”) regulations overturned a portion of Auer. However, the court
relies on these cases for principles unaltered by the 2004 DOL regulations.
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on a wage basis”); Int’l Ass’n of Fire Fighters, Alexandria Local 2141 v. City of
Alexandria, Va., 720 F. Supp. 1230, 1232 (E.D. Va. 1989), aff’d, 912 F.2d 463 (4th
Cir. 1990) (“While personal leave, sick leave and/or compensatory time may be
part of an employee’s compensation package, it does not constitute salary.”).
The Department of Labor (“DOL”) has issued opinion letters which
corroborate this conclusion.14 See, e.g., DOL Wage and Hour Opinion Letter (Jan.
16, 2009) (“Employers can, however, make deductions for absences from an
exempt employee’s leave bank in hourly increments, so long as the employee’s
salary is not reduced. If exempt employees receive their full predetermined salary,
deductions from a leave bank, whether in full day increments or not, do not affect
their exempt status.” (citing 69 Fed. Reg. 22,122, 22,178 (Apr. 23, 2004); Wage
and Hour Opinion Letter February 18, 1999)); DOL Wage and Hour Opinion
Letter (Sept. 14, 2006) (“Where an employer has a bona fide benefits plan (e.g.,
vacation time, sick leave), it is permissible to substitute or reduce the accrued leave
in the plan for the time an exempt employee is absent from work, whether the
absence is a partial day or a full day, without affecting the salary basis of payment,
if the employee nevertheless receives payment of his or her guaranteed salary.

14

While not binding authority, opinion letters from the DOL “are entitled to great weight when
they interpret the DOL’s own (ambiguous) regulations.” McBride, 688 F.3d at 705 (quoting In
re Wal-Mart Stores, Inc., Fair Labor Standards Act Litig., MDL 1139 v. Wal-Mart Stores, Inc.,
395 F.3d 1177, 1184 (10th Cir. 2005)).
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Where the employee’s absence is for less than a full day, payment of the
employee’s guaranteed salary must be made, even if an employee has no accrued
benefits in the leave plan and the account has a negative balance.”) (citing DOL
Wage and Hour Opinion Letter (Jan. 7, 2005)). Accordingly, deductions from a
leave bank, such as PTO, when an employee is absent from work do not affect the
employer’s ability to claim an exemption.
In addition, several cases interpreting employer policies similar to that at
issue in this case have found that the policies do not violate the FLSA. See, e.g.,
McBride, 688 F.3d at 705−06 (finding no FLSA violation where the employer’s
policy did not allow for salary deduction under any circumstance; if all of the
employee’s “accrued leave had been deducted, no further penalty would have been
imposed”); Caperci, 43 F. Supp. 2d at 91 (finding that “an internal accounting
charge” taken against an employee’s “regular” pay from his vacation pay account
that did not “cause a reduction of or otherwise affect [Plaintiff’s] gross
compensation” did not violate the FLSA); Haywood v. North American Van Lines,
Inc., 121 F.3d 1066, 1070 (7th Cir. 1997) (“Even if [Plaintiff] had chosen not to
make up this time before taking it off, her salary would not have been reduced.

23

Instead, she would have been issued a check in the same amount as always, and
she would have had one fewer day of sick leave or personal leave.”). 15
The court notes that Plaintiffs have cited two cases, Elwell v. Univ. Hosps.
Home Care Servs., 276 F.3d 832 (6th Cir. 2002) and Oral v. Aydin Corp., No. 98cv-6394, 2001 U.S. Dist. LEXIS 20625 (E.D. Pa. Oct. 31, 2001), in support of
their position that they were actually hourly employees, rather than salaried. The
court finds that neither of these cases alter the outcome of this case. Elwell
involved home health care nurses who were paid on a fee basis, and also received
hourly compensation for visits that lasted more than two hours. 276 F.3d at 835.
The Sixth Circuit found that the regulations governing fee basis payment schemes
did not permit a hybrid payment structure, i.e., payment of a fee per visit plus
hourly compensation, because the employee must be paid for a completed task
“regardless of the time required for its completion.” Id. at 838 (quoting 29 C.F.R.
§ 541.313(b)). In addition, the Sixth Circuit recognized that the salary basis

15

The court recognizes that the above-cited authorities are not binding, and in many cases, are
slightly distinguishable from the present case. Specifically, many of the above-referenced cases
involve employers with policies that deduct fringe benefits for an employee opting to take a
partial or full day’s absence, rather than a failure to meet a weekly point expectation. However,
the court does not find this distinguishing feature sufficient to render the cases unhelpful; the
guiding legal principles upon which they were decided can be applied to this case. Moreover, in
the absence of controlling authority on the issue presented, the court finds these cases to be
persuasive and useful in deciding this case. Indeed, the parties have not cited, and the court has
not independently found, any authority addressing the precise circumstances in this case. Many
of the cases dealing with home health care companies involve employees paid on a fee basis,
rather than the salary basis presented here.
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regulation, which applies to the instant case, but was not implicated in Elwell,
explicitly permits hybrid compensation schemes since the regulation provides that
“additional compensation besides the salary is not inconsistent with the salary basis
of payment.” Id. at 838−39 (citing 29 C.F.R. § 541.118(b) recodified in 2004 as 29
C.F.R. § 541.604). Thus, Plaintiffs’ reliance on Elwell is misplaced, and indeed
appears to support the validity of Bayada’s compensation structure.
Likewise, Oral is inapplicable to this case because it was decided based on
the now-defunct Supreme Court opinion in Auer. In Oral, the court found that “the
class of opt-in plaintiffs . . . face[d] a threat that their pay would be docked for a
partial day absence unless they used sick or vacation leave to cover the absence.”
2001 U.S. Dist. LEXIS 20625, at *22. Thus, the Oral court applied the
“significant likelihood” of improper deductions test and did not examine whether
the employer had an actual practice of making improper deductions, finding that
this question presented an issue for the jury to decide. Id. at *22−23. As explained
above, the current regulations specify that an actual practice of making improper
deductions is required and omit Auer’s conclusion that a “significant likelihood” of
deductions violates the salary basis test. See Escribano, 947 F.3d at 274; Orton,
668 F.3d at 847−48 (citing Baden-Winterwood, 566 F.3d at 618). There is no
dispute of material fact regarding whether Bayada actually made improper

25

deductions that would preclude the entry of summary judgment in this case. Thus,
the court finds that Oral also does not affect the outcome of this case.
Finally, the fact that Bayada based its bonus payments and point system on
an hourly wage metric does not defeat the salary basis test. The regulations
explicitly state that:
An exempt employee’s earnings may be computed on an hourly, a daily
or a shift basis, without losing the exemption or violating the salary
basis requirement, if the employment arrangement also includes a
guarantee of at least the minimum weekly required amount paid on a
salary basis regardless of the number of hours, days or shifts worked,
and a reasonable relationship exists between the guaranteed amount and
the amount actually earned. The reasonable relationship test will be
met if the weekly guarantee is roughly equivalent to the employee’s
usual earnings at the assigned hourly, daily or shift rate for the
employee’s normal scheduled workweek. Thus, for example, an
exempt employee guaranteed compensation of at least $725 for any
week in which the employee performs any work, and who normally
works four or five shifts each week, may be paid $210 per shift without
violating the $684-per-week salary basis requirement.
29 C.F.R. § 541.604(b). In addition, the regulations allow a salary basis employee
to earn additional compensation, which “may be paid on any basis (e.g., flat sum,
bonus payment, straight-time hourly amount, time and one-half or any other basis),
and may include paid time off.” 29 C.F.R. § 541.604(a). Thus, Bayada does not
lose its exemption merely because its employees’ earnings are computed on an
hourly basis. In addition, Plaintiffs have not alleged, and the court does not
discern, that the reasonable relationship test has not been satisfied. Therefore, the

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court finds that Bayada’s computation of its employees’ earnings on an hourly
basis does not void its exemption.
It is without question that if Bayada maintained a practice of requiring an
employee’s salary to be reduced for failure to meet their weekly expected
productivity points when their PTO bank was empty, it would not qualify for the
professional employee exemption under the FLSA. See Wolfslayer, 2004 U.S.
Dist. LEXIS 22625 at *20 n.5 (collecting cases). However, that is not the practice
presented in this case. Rather, Bayada maintained a practice of not reducing
clinicians’ weekly compensation below their guaranteed amount even if they did
not meet their productivity points expectation and even if the employee did not
have any remaining PTO. An employee’s guaranteed weekly compensation was
only subject to reduction in the event that an employee was absent for an entire day
of work and lacked sufficient PTO to cover the absence—a practice which is
wholly consistent with the FLSA’s requirements and the regulations. See 29
C.F.R. § 541.602(b). Bayada’s practice is corroborated by Plaintiffs’ pay stubs and
Plaintiffs have not produced any evidence that Bayada deviated from this practice
in any instance.
Bayada’s practice was to reduce clinicians’ available PTO when the
clinician failed to meet their expected weekly productivity point figure. While a
failure to meet a points expectation is not an absence from work, as described in

27

the above-cited caselaw, the court finds that the effect of falling below the point
expectation can be construed as equivalent to an absence. Just as the employers in
the above-cited cases expected that their employees would be present at work for a
certain number of hours per day or week, Bayada expected its employees to earn a
certain number of points per week. A failure to meet these expectations may be
accompanied by a decrease in fringe benefits, provided that the employer in no
event reduces an employee’s salary. Bayada provided ample opportunity for
clinicians to make up missing points and offered counseling and coaching
opportunities for clinicians that consistently fell below their weekly productivity
metrics. For clinicians who were unable to consistently meet their productivity
metrics, they could request a reduction in their weekly point expectation, subject to
a corresponding decrease in salary.
Whether Bayada fostered, permitted, or turned a blind eye to a belief,
culture, or perception among clinicians that their weekly compensation may be
reduced in instances where they lacked PTO and fell below their expected
productivity points is no longer relevant for the court’s consideration. See
Escribano, 947 F.3d at 274; Orton, 668 F.3d at 847−48 (citing Baden-Winterwood,
566 F.3d at 618). The court is simply concerned with whether Bayada maintained
an actual practice of reducing clinicians’ salaries once they fell below their weekly
expected productivity points and did not have any remaining PTO to supplement.

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In this case, it is clear from the record that Bayada did not maintain such a practice.
Therefore, the court finds that Bayada’s compensation structure fits within the
FLSA’s salary basis test and qualifies for the professional employee exemption
from overtime pay. Summary judgment is accordingly appropriate and will be
granted.
CONCLUSION
For the foregoing reasons, the court will grant the motion for summary
judgment and deny the motion for oral argument. An appropriate order will issue.
s/Jennifer P. Wilson
JENNIFER P. WILSON
United States District Court Judge
Middle District of Pennsylvania
Dated: September 22, 2021

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