In the Matter of Walter E. Carver, Respondent,v.State of New York, et al., Appellants.BriefN.Y.September 16, 2015No. APL - 2014 – 00157 To be Argued by: Susan C. Antos 20 Minutes Requested STATE OF NEW YORK COURT OF APPEALS In the Matter of the Application of WALTER E. CARVER, Petitioner-Respondent, For a Judgment Pursuant to CPLR Article 78 Index No. 12355/08 Supreme Court -against- Kings County THE STATE OF NEW YORK, THE NEW YORK STATE DEPARTMENT OF TAXATION & FINANCE and ROBERT MEGNA, Commissioner of the New York State Department of Taxation & Finance, THE NEW YORK STATE OFFICE OF TEMPORARY AND DISABILITY ASSISTANCE AND DAVID A. HANSELL, Commissioner of the New York State Office of Temporary and Disability Assistance, and THE NEW YORK STATE DIVISION OF LOTTERY and GORDON MEDENCIA, Director of the New York State Division of Lottery, Respondents-Appellants. __________________________________________________________________ BRIEF FOR RESPONDENT __________________________________________________________________ Dated: December 8, 2014 EMPIRE JUSTICE CENTER Susan C. Antos, of counsel Saima A. Akhtar, of counsel Raymond Burke, law graduate on the Memorandum of Law 119 Washington Avenue, 3 rd Fl. Peter O’Brian Dellinger, of counsel Albany, New York 12210 Bryan D. Hetherington, of counsel Telephone: (518) 935-2845 One West Main Street, Suite 200 Fax: (518) 935-2852 Rochester, New York 14604 santos@empirejustice.org Telephone: (585) 295-2809 i TABLE OF CONTENTS TABLE OF AUTHORITIES .................................................................................. iii QUESTION PRESENTED ....................................................................................... 1 PRELIMINARY STATEMENT .............................................................................. 1 ARGUMENT I. THE DECISION OF THE APPELLATE DIVISION WAS CORRECT: MR. CARVER IS ENTITLED TO THE PROTECTION OF THE FAIR LABOR STANDARDS ACT ............ 5 II. NEW YORK STATE HAS HISTORICALLY CREDITED THE VALUE OF WORKFARE TO REDUCE PUBLIC ASSISTANCE DEBT ........................................................................... 9 III. WORK EXPERIENCE WORKERS ARE EMPLOYEES UNDER THE FAIR LABOR STANDARDS ACT ........................... 13 A. Courts Interpret the FLSA Broadly Because It is Remedial Legislation that Seeks to Protect Employees from Substandard Working Conditions ......................................... 13 B. Under the Economic Reality Test, Workfare Participants Like Mr. Carver Are Employees for Purposes of the FLSA ......... 14 C. Mr. Carver’s Status as a Workfare Recipient Does Not Preclude Him From Also Being an Employee Covered FLSA .............................................................................................. 17 D. The Appellant’s Reliance on Brukhman is Misplaced ................... 25 E. Federal Administrative Guidance Expressly States that the FLSA Applies to Workfare and Congress Acknowledged this Guidance in Subsequent PRWORA Amendments ................. 27 ii CONCLUSION ........................................................................................................ 31 EXHIBIT A ............................................................................................................. 33 EXHIBIT B ............................................................................................................. 39 iii TABLE OF AUTHORITIES Federal Cases Page(s) Archie v Grand Cent. Partnership, Inc., 997 F Supp 504 [SD NY 1998] .......................................................................... 19 Barrentine v Arkansas-Best Freight System, Inc., 450 US 728 [1981] .............................................................................................. 12 Bartels v Birmingham, 332 US 126 [1947] .............................................................................................. 15 Brock v Superior Care, Inc., 840 F2d 1054 [2d Cir 1988] ................................................................... 14, 15, 19 Brooklyn Savings Bank v O'Neil, 324 US 697 [1945] .............................................................................................. 13 Carter v Dutchess Community College, 735 F2d 8 [2d Cir 1984] ..................................................................................... 18 Castillo v Case Farms of Ohio, Inc., 96 F Supp 2d 578 [WD Tex 1999] ..................................................................... 23 Danneskjold v Hausrath, 82 F3d 37 [2d Cir 1996] ..................................................................................... 18 Elwell v Weiss, 2007 WL 2994308 [WD NY, Sept. 29, 2007, No. 03-CV-6121] ............................ 7, 8, 20, Exhibit A Falk v Brennan, 414 US 190 [1973] ................................................................................................ 5 Frankel v Bally, Inc., 987 F2d 86 [2d Cir 1993] ........................................................................... 6, 7, 15 iv Federal Cases (cont’d) Page(s) Frasier v General Electric Co., 930 F2d 1004 [2d Cir 1991] ............................................................................... 20 Glatt v Fox Searchlight Pictures Inc., 293 FRD 516 [SD NY 2013], lv granted, No 11 CIV 6784 WHP, 2013 WL 5405696 [SD NY Sept. 17, 2013] ................................................ 14, 19 Johns v Stewart, 57 F3d 1544 [10th Cir 1995] .................................................................. 19, 20, 21 Marshall v Quick-Trip Corp., 672 F2d 801 [10th Cir 1982] .............................................................................. 23 Mayhue's Super Liquor Stores, Inc. v Hodgson, 464 F2d 1196 [5th Cir 1972] .............................................................................. 23 McLaughlin v Ensley, 877 F2d 1207 [4th Cir 1989] .............................................................................. 19 Mitchell v Lublin, McGaughy & Assocs., 358 US 207 [1959] .............................................................................................. 13 Morangelli v Chemed Corp., 922 F Supp 2d 278, 299 [ED NY 2013] recon denied in part, No. 10 CIV. 0876 BMC, 2013 WL 1212790 [ED NY Mar. 25, 2013] .............. 23 Nationwide Mut. Ins. Co. v Darden, 503 US 318 [1992] ............................................................................................ 5, 7 North Haven Board of Education v Bell, 456 US 512 [1982] .............................................................................................. 30 O’Connor v Davis, 126 F3d 112 [2d Cir 1997] ................................................................................... 8 Powell v United States Cartridge Co., 339 US 497 [1950] .............................................................................................. 13 v Federal Cases (cont’d) Page(s) Rutherford Food Corp. v McComb, 331 US 722 [1947] ................................................................................ 5, 7, 15, 24 Stone v McGowan, 308 F Supp 2d 79 [ND NY 2004] ..................................................................... 7, 9 Tennessee Coal, Iron & R.R. Co. v Muscoda Local No. 123, 321 US 590 [1944] .............................................................................................. 13 Teoba v Trugreen Landcare LLC, 769 F Supp 2d 175 [WDNY 2011] ..................................................................... 23 Tony & Susan Alamo Found. v Sec. of Labor, 471 US 290 [1985] .......................................................................................passim United States v City of New York, 359 F3d 83 [2d Cir 2004], cert denied 543 US 1146 [2005] ......................passim United States v Rosenwasser, 323 US 360, 362 [1945] ................................................................................ 14, 18 United States v Silk, 331 US 704, 716 [1947] ...................................................................................... 15 Watson v Graves, 909 F2d 1549 [5th Cir 1990] .............................................................................. 19 Zheng v Liberty Apparel Co. Inc., 355 F3d 61 [2d Cir 2003] ................................................................................... 15 State Cases Allen v City of New York, 147 Misc 2d 62 [Sup Ct, Bronx County 1990] ................................................... 12 Brukhman v Giuliani, 94 NY2d 387 [2000] ............................................................................... 25, 26, 27 vi State Cases (cont’d) Page(s) Carver v State of New York, 87 AD3d 25 [2d Dept 2011] ........................................................................passim De La Cruz v Caddell Dry Dock & Repair Co., Inc., 21 NY3d 530 [2013] ........................................................................................... 27 Maiceo v City of Yonkers, 263 AD 914 [3rd Dept 1942], affd 288 NY 689 [1942] ........................... 9, 12, 25 Melish v City of NY, 7 Misc 3d 1009(A) [Sup Ct, NY County 2005] ................................................. 22 Walker v Shang, 66 AD2d 6 [2d Dept 1979] ........................................................................... 10, 11 New York Constitution Article I, § 17 ........................................................................................................... 26 State Statutes Chapter 77 of the Laws of 1977 ............................................................................... 10 Chapter 453 of the Laws of 1990 ............................................................................. 11 Chapter 436 of the Laws of 1997 ......................................................................... 9, 11 Social Services Law § 104 ...................................................................................................................... 2 § 104-b .................................................................................................................. 3 § 105 ...................................................................................................................... 3 § 106 ...................................................................................................................... 3 § 111-c .................................................................................................................. 4 § 131-r ........................................................................................................... 2, 3, 4 § 153 ...................................................................................................................... 2 § 331 .................................................................................................................... 11 § 336-c .........................................................................................................passim § 342 ................................................................................................................ 2, 16 § 348 ...................................................................................................................... 4 vii Federal Statutes and Related Documents Page(s) 29 USC § 201 et seq. ...................................................................................................... 3, 4 § 202 .............................................................................................................. 12, 24 § 203 ............................................................................................................ 6, 7, 14 § 213 .................................................................................................................... 18 § 1002 .................................................................................................................... 8 42 USC § 601 et seq. .................................................................................................. 11, 28 § 607 .................................................................................................................... 28 § 2000e et seq............................................................................................ 5, 6, 7, 8 143 Cong Rec H6342 [July 30, 1997] ..................................................................... 31 143 Cong Rec S8386-8410 [July 31, 1997] ............................................................. 31 HR Conf Rep 217, 105th Cong, 1st Sess at 934, reprinted in 1997 US Code Cong & Admin News at 176, 555 .......................... 30 Pub L. 105-33, 111Stat 606, the Balanced Budget Act of 1997 ....................................................................... 31 Federal Regulations 29 CFR § 515 et seq. ................................................................................................ 12 45 CFR § 260.35 ................................................................................................ 12, 29 Federal Policy Documents United States Department of Labor, Fair Labor Standards Act Advisor on Trainees, http://www.dol.gov/elaws/esa/flsa/docs/trainees.asp [accessed Dec. 3, 2014] ...................................................................................... 19 United States Department of Labor, How Workplace Laws Apply to Welfare Recipients at Q & A No. 1 [May 1997, revised Feb 1999] .......................................................... 29, Exhibit B viii Other Publications Page(s) Laura Wernick, John Krinsky, Paul Getsos, Community Voices Heard, WEP: New York City’s Public Sector Sweatshop Economy, available at http://cvh.mayfirst.org/files/WEP%20Work%20Experience%20Program.pdf [accessed Dec. 3, 2014] ...................................................................................... 22 Mayor's Office of Operations, Final Fiscal Year 1997 Mayor's Management Report Summary Volume 67 [1997], available at http://www.nyc.gov/html/ops/downloads/pdf/mmr/0997_summary.pdf [accessed Dec. 3, 2014] ................................................................................ 24, 25 Nan S. Ellis, Work Is Its Own Reward: Are Workfare Participants Employees Entitled To Protection Under The Fair Labor Standards Act?, 13 Cornell J L & Pub Policy 1 [2003] ................................................................ 22 New York City Department of Transportation, Information on the Staten Island Ferry, available at https://www.dot.ny.gov/divisions/policy-and-strategy/public-trans- respository/sif_1.pdf [accessed Dec. 3, 2014] .................................................... 16 Steven Greenhouse, Many Participants in Workfare Take the Place of City Workers, NY Times, Apr. 13, 1998, available at http://www.nytimes.com/1998/04/13/nyregion/many-participants-in-workfare- take-the-place-of-city-workers.html [accessed Dec. 3, 2014] ............................ 22 The Staten Island Ferry Website, http://www.siferry.com/ [accessed Dec. 3, 2014] .............................................. 16 1 QUESTION PRESENTED Must the New York State Office of Temporary and Disability Assistance (OTDA) credit the value of workfare performed by a recipient of public assistance when the OTDA intercepts the lottery winnings of a recipient or former recipient to recover the value of public assistance properly paid? PRELIMINARY STATEMENT From 1995 to 2000, Walter Carver, a Vietnam War veteran, worked 35 hours every week at the Staten Island Ferry Terminal, sweeping floors, picking up trash, and in the winter, salting the ferry walkways, as a member of New York City’s Work Experience Program (WEP) (Appendix [A.] 5, 81-82). 1 Mr. Carver performed this maintenance work in exchange for his public assistance grant, commonly known as “workfare.” Mr. Carver’s weekly 35 hours of assigned maintenance work at the Ferry Terminal was determined by a statutory formula based on the monthly amount of his public assistance and food stamps (now called Supplemental Nutrition Assistance or “SNAP” benefits) divided by the federal minimum wage rate (Social Services Law [SSL] § 336-c [2] [b]; A. 108 (07-ADM-08), 161 (Sullivan Aff. ¶ 9)). Mr. Carver’s work at the Ferry Terminal did not require skill, experience, or 1 Mr. Carver also worked at the Coney Island Hospital while a recipient of public assistance but not during the time period covered by the lottery intercept (1997-2000). Mr. Carver started as a WEP worker in 1993 and was assigned to the Staten Island Ferry Terminal two years later (A. 5, 81-82). 2 education. He never received any training for his sweeping and maintenance duties during his five years of employment (A. 81-82). At the same time, his refusal or failure to perform the assigned maintenance work would have resulted in the loss of his cash benefits as well as his food stamps (SSL § 342 (“[A]n individual who is required to participate in work activities shall be ineligible to receive public assistance if he or she fails to comply.”)). The cash portion of Mr. Carver’s workfare benefits was funded equally by New York State and New York City (SSL § 153 [1] [d]; A. 99-100 (Schollenberger Aff. ¶¶ 6-7)). Mr. Carver stopped receiving public assistance in 2000, and some seven years later, he won $10,000 in the New York State Lottery (A. 5). New York Social Services Law § 131-r provides that any recipient who has received public assistance funds during the past 10 years and who wins a lottery prize of $600 or more must reimburse the Office of Temporary and Disability Assistance (Appellant or OTDA) from the winnings, up to half of the prize amount. Following this statute, the Appellant intercepted $5,000 of Mr. Carver’s lottery winnings, purportedly for reimbursement of the workfare benefits Mr. Carver received while working at the Ferry Terminal from 1997-2000 (A. 5, 99-100 (Schollenberger Aff. ¶¶ 6-7)). 2 2 Properly paid public assistance is a debt subject to recovery under a number of provisions of New York’s Social Services Law unless it is extinguished by some kind of repayment. Recovery is expressly authorized against windfalls such as inheritances (SSL § 104), personal injury 3 Soon thereafter, Mr. Carver received a notice from OTDA advising him that the agency would not keep his lottery prize “if you show us that you have already repaid your public assistance,” and upon written request, OTDA would review his case (A. 62). Through his counsel, Mr. Carver objected to the lottery intercept, explaining that during the three year period at issue, he had repaid any outstanding debt by working over 30 hours per week at the Staten Island Ferry Terminal in exchange for his public assistance benefits (A. 63). By letter dated December 21, 2007, from John P. Bailly, Jr., General Counsel at OTDA, Appellant rejected Mr. Carver’s claim that he had worked off his debt, stating that “[w]ork experience is not ‘employment’ and the amount of public assistance that an individual receives is not ‘wages’” (A. 68). Mr. Carver then brought this proceeding. The Appellate Division, Second Department concluded that Mr. Carver was “entitled to the [minimum] wage protections of the Federal Fair Labor Standards Act” of 1938 (29 USC § 201 et seq.), while engaged in workfare and remitted the case to the Supreme Court, Kings County (Carver v State of New York, 87 AD3d 25, 27, 33-35 [2d Dept 2011]). The Supreme Court, Kings County then held that “any forfeiture of [Mr. Carver’s] lottery winnings would, under these particular facts and circumstances, awards (SSL § 104-b), insurance proceeds (SSL § 105), and lottery winnings (SSL § 131-r). Local districts may even require applicants for public assistance who own their own homes to provide the district a mortgage equal to the sum of public assistance paid as a condition of eligibility for assistance (SSL § 106). 4 result in a federal wage violation under 29 USC sec. 201, et seq. . . .” and directed the OTDA to return the $5,000 in intercepted lottery winnings to Mr. Carver (A. 10). Thereafter, the parties entered into a stipulation in which the Appellant agreed to pay Mr. Carver $5,000 should Mr. Carver prevail in this matter (A. 256 (Stipulation and Order of Contingent Settlement ¶ 2)). The issue on this appeal is whether OTDA may intercept lottery winnings from a recipient or former recipient of public assistance to recover the value of public assistance properly paid, without crediting the value of the work performed in a work experience assignment while receiving such assistance. The Second Department correctly held that because the Fair Labor Standards Act (FLSA) applies to workfare participants engaged in work activities performed in exchange for public benefits, the value of Mr. Carver’s work must be recognized and credited towards repayment of his public assistance debt (Carver, 87 AD3d 25). Before intercepting a lottery award to recover a public assistance debt, the Appellant is already obliged to determine whether there are certain credits, such as child support collections, that should be applied against the debt (SSL § 131-r [2]). 3 The Second Department’s decision would require the Appellant to make one 3 Pursuant to SSL §§ 111-c (2) (a) and 348 (2), an application for public assistance operates as an assignment of support rights in favor of the social services district that provides the applicant 5 more inquiry before finalizing the amount of debt that could be recovered through lottery intercept. ARGUMENT I. THE DECISION OF THE APPELLATE DIVISION WAS CORRECT: MR. CARVER IS ENTITLED TO THE PROTECTION OF THE FAIR LABOR STANDARDS ACT. The Appellate Division correctly concluded that Mr. Carver was entitled to the minimum wage protections of the Fair Labor Standard Act of 1938 for his workfare activities, relying on decisions of the Supreme Court of the United States, which emphasized the expansive nature of the FLSA's coverage (Carver, 87 AD3d at 29-30 (citation omitted); see also Nationwide Mut. Ins. Co. v Darden, 503 US 318, 326 [1992]; Rutherford Food Corp. v McComb, 331 US 722, 728-29 [1947]; cf. Falk v Brennan, 414 US 190, 195 [1973] (discussing the “expansiveness” of the FLSA’s definition of employer)). The Appellate Division reasoned that this “expansive interpretation” and the remedial nature of the FLSA (Carver, 87 AD3d at 29 (citation omitted)) made Walter Carver an employee under this federal statute (id. at 33). In determining that the FLSA applied to workfare participants, the Second Department relied on United States v City of New York (359 F3d 83 [2d Cir 2004], cert denied 543 US 1146 [2005]), which held that WEP workers are “employees” with assistance. The bulk of the child support collected on behalf of a public assistance recipient is retained by the district to reimburse itself for public assistance paid. 6 for purposes of Title VII of the Civil Rights Act of 1964 (42 USC § 2000e et seq.). The Appellate Division noted that, in City of New York, the Second Circuit applied the common law definition of “employee” used in Title VII and observed that the “definition of ‘employee’ in the FLSA is considerably more inclusive” (Carver, 87 AD3d at 32-33 (citations omitted); see also Frankel v Bally, Inc., 987 F2d 86, 89 [2d Cir 1993]). In concluding that WEP workers are employees for purposes of Title VII, the Second Circuit stated The plaintiffs allege that they received cash payments and food stamps in return for their work for the city. Those payments equaled the minimum wage times the number of hours the plaintiffs worked. A plaintiff who unjustifiably refused to work would lose the portion of the family’s grant attributable to her . . . A functional commonsense assessment of the plaintiffs’ alleged relationship with the city results in the conclusion that they were employees. (City of New York, 359 F3d at 92.) The Fair Labor Standards Act contains a broader definition of “employee” than Title VII. In Mr. Carver’s case, the Second Department correctly held that since WEP workers like him have been found to be covered employees for Title VII purposes, they are also entitled to the protections of the FLSA (Carver, 87 AD3d at 27, 31). At their core, Title VII and FLSA spring from an identical description of who is an employee: “any individual employed by an employer” (compare 42 USC § 2000e [f] (Title VII) with 29 USC § 203 [e] (FLSA)). However, the statutes differ in that Congress defined “to employ” in the FLSA but 7 chose not to do so in Title VII (compare 29 USC § 203 [g] (FLSA) with 42 USC § 2000e [f] (Title VII)). The Supreme Court has stated that the FLSA stretches the meaning of “employ” by defining it as including “to suffer or permit to work” (29 USC § 203 [g]; Nationwide Mut. Ins. Co., 503 US at 326, citing Rutherford Food Corp., 331 US at 728; see also Frankel, 987 F 2d at 89). FLSA not only covers workers who were employees at common law, it also applies to “many persons and working relationships,” which prior to its enactment in 1938, “were not deemed to fall within an employer-employee category” (Rutherford Food Corp., 331 US at 729 (citation omitted)). 4 Thus, an employee who is entitled to Title VII protections must also be an employee for FLSA purposes, and entitled to its protections (see Elwell v Weiss, 2007 WL 2994308, *3-5 [WD NY, Sept. 29, 2007, No. 03-CV- 6121] attached hereto as Exhibit A). The Second Department also relied on the two New York federal court decisions that determined WEP participants are employees for purposes of the FLSA: Elwell v Weiss (id.) and Stone v McGowan (308 F Supp 2d 79 [ND NY 4 The Appellant erroneously relies on O’Connor v Davis (126 F3d 112 [2d Cir 1997]) for the proposition that courts should emphasize principles of common-law agency doctrine and the conventional master-servant relationship in order to determine whether an individual is an employee under FLSA (App. Brf. at 25, 39). It is true that courts look to common-law agency doctrine when Congress uses the term “employee” without defining it with precision (Nationwide, 503 US at 322-23; O’Connor, 126 F3d at 115). However, the cases that Appellant cites, O’Connor and Nationwide, were interpreting Title VII and the Employee Retirement Income Security Act of 1974 (ERISA) respectively, which define “employee” differently than FLSA (compare 42 USC § 2000e (f) (Title VII) and 29 USC § 1002 (6) (ERISA) with 29 USC § 203 (e) (FLSA)). ERISA, like Title VII, contains a narrower definition of employee than FLSA (see Nationwide, 503 US at 326 (FLSA, “on its face, goes beyond its ERISA counterpart”)). Therefore, O’Connor in no respect narrows the definition of “employee” under FLSA. 8 2004]). (Carver, 87 AD3d at 33-33.) In Elwell, a workfare participant received a retroactive award of Supplemental Security Income (SSI). Mr. Elwell had been assigned to a “mobile work crew” by the Schuyler County Department of Social Services as his workfare assignment, and had been required to dig ditches, carry construction materials, and engage in other construction and physical labor. When he later became eligible for SSI, the local social services district intercepted his SSI award in order to repay itself for the public assistance paid to Elwell during the time his SSI application was pending. The Federal District Court for the Western District of New York held that the interception of Mr. Elwell’s retroactive SSI award violated the FLSA (Elwell, 2007 WL 2994308 at *6). The Elwell court found that the defendant County controlled the “manner and means of employment” (id. at *4); that the hours of work were determined by dividing the size of the grant by the minimum wage, “an all too typical way of calculating compensation for work” (id., quoting City of New York, 359 F3d at 96); that workfare workers are covered by workers’ compensation (id.), and therefore, concluded that Mr. Elwell was an employee within the protection of the FLSA, relying on both the functional commonsense assessment applied in City of New York and a fact-based analysis (id. at *5-6). The district court reached the same conclusion for FLSA as the Second Circuit had for Title VII: that one could be 9 both a recipient of public assistance and an employee (id. at *5, quoting City of New York, 359 F3d at 94). In Stone v McGowan, Mr. Stone worked for the Oswego Department of Social Services (OCDSS) doing highway maintenance as a condition of eligibility for his public assistance (308 F Supp 2d at 81). He was assigned more hours of work than the amount of his benefits divided by the minimum wage and sought to recover his unpaid compensation, alleging that OCDSS had violated the FLSA by failing to pay him the minimum wage for his work (id.). Based on the court’s analysis and the decision in City of New York, the County’s motion to dismiss was denied (id. at 86). The Second Department’s decision follows logically from this line of Title VII and FLSA cases. Mr. Carver is entitled to the protections of the FLSA and the decision below should be upheld. II. NEW YORK STATE HAS HISTORICALLY CREDITED THE VALUE OF WORKFARE TO REDUCE PUBLIC ASSISTANCE DEBT. Requiring welfare recipients to work in exchange for their benefits is not new. Work Experience Programs, also called “workfare,” have been required of New York welfare recipients since at least 1942 (Maiceo v City of Yonkers, 263 AD 914 [3rd Dept 1942], affd 288 NY 689 [1942]). For many decades prior to New York State’s 1997 Welfare Reform Act (L 1997, ch 436), it was the policy of 10 New York State to give workfare participants credit for the work they performed when calculating the amount of public assistance debt they are liable to repay. The first attempt to change this policy was made in 1977 by the predecessor agency to the Office of Temporary and Disability Assistance, the New York State Department of Social Services (NYSDSS), but it was successfully challenged in Walker v Shang (66 AD2d 6 [2d Dept 1979]). 5 The Walker Court held that the failure to credit workfare against a welfare mortgage lien was an improper “windfall” which allowed the county to receive the benefit of Mr. Walker’s work, “gratis” (id. at 16). Although the Walker Court did not consider the Fair Labor Standards Act, the Court’s analysis is parallel and complementary. In Walker, the Second Department concluded that it was necessary to determine whether the “true expense incurred by the county agency” is “the actual amount paid to the petitioner” or whether “that amount [is] diminished by the amount of money he earned by work for work done by the county” (id. at 12). For another 20 years, NYSDSS deducted the value of workfare from public assistance debt with little difficulty or controversy. The Walker rule was New York common law until it was codified as part of the Job Opportunities and Basic Skills (JOBS) Program of 1990. Social Services Law § 336-c was amended to provide: 5 The decision in Walker v. Shang notes that prior to litigation, Carmen Shang, then General Counsel of the NYSDSS had advised Mr. Walker’s counsel that “prior to the effective date of section 8 of Chapter 77 of the Laws of 1977 persons participating in public works projects should be considered to be ‘working off’ their grants” (66 AD2d at 9). 11 a social services official may not assert any lien under any provision of this chapter to recover payments of public assistance if such payments were included in the calculation of hours of participation in a work experience program under this section and to the extent of such hours that such person actually participated in a work experience project. (L 1990, ch 453, § 1.) When the federal Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) (42 USC § 601 et seq.) reformed welfare in 1996, New York’s implementing legislation, Section 148 of chapter 436 of the Laws of 1997, repealed this explicit crediting provision in SSL § 336-c. 6 Yet, the definition of work experience did not materially change, 7 and the Walker rule, which existed in common law before the repeal of the statutory provision, was never mentioned or addressed. Other parts of the 1990 JOBS legislation remain in effect as well. For instance, New York Social Services Law states that it is the “policy of the state” to “furnish work activities” to “individuals receiving public assistance” and requires all workfare activities “to operate in compliance with federal and state law and 6 Appellant references the emphasis on training in the JOBS program, presumably to bolster its argument that workfare is training (App. Brf. at 7-8). However, JOBS was passed in New York State in 1990 (L 1990, ch 453), and Appellant continued to provide credit for workfare for seven years until this repeal went into effect on August 20, 1997. 7 Before the 1997 amendments, “work experience” was called “Community Work Experience.” However, other than amending the title, the definition in SSL § 336-c (1) (b) remained the same: “the performance of work for a federal office or agency, county, city, village or town or for the state or in the operation of or in an activity of a nonprofit agency or institution” (compare SSL § 336-c (1) (b) with the previous § 336-c (1) (b) (L 1990, ch 453, § 1)). 12 regulations” (SSL § 331 [1]) (emphasis added). State policy requiring “compliance with federal law” ineluctably includes Appellant’s compliance with the FLSA and its accompanying regulations, 29 CFR § 515 et seq. Additionally, workfare placements are required to maintain “appropriate federal and state standards of health, safety and other work conditions” (SSL § 336-c [2] [a] (emphasis added)). Certainly such health and safety standards include the FLSA, which for the last 75 years has protected workers from “labor conditions [that are] detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers” (Barrentine v Arkansas-Best Freight System, Inc., 450 US 728, 739 [1981], quoting 29 USC § 202 [a]; see also 45 CFR § 260.35 [b], discussed infra at 28-29). Finally, all “work experience” participants are required to be provided with appropriate workers’ compensation when engaged in workfare activities (SSL § 336-c [2] [c]). This Court long ago determined that for purposes of workers’ compensation, workfare recipients are “employees” when they are required to work as a condition of receiving public benefits (Maiceo, 263 AD 914). As further discussed infra at 17, this is an important indicium of employment. “The municipality to which a [workfare] worker is assigned receives the benefit of the labor; workers' compensation coverage is a small price to pay” (Allen v City of New York, 147 Misc 2d 62, 63-64 [Sup Ct, Bronx County 1990]). 13 III. WORK EXPERIENCE WORKERS ARE EMPLOYEES UNDER THE FAIR LABOR STANDARDS ACT. A. Courts Interpret the FLSA Broadly Because it is Remedial Legislation that Seeks to Protect Employees from Substandard Working Conditions. Walter Carver performed useful public work in exchange for his public assistance benefits and the Appellant, by intercepting his lottery winnings, has taken away his wages. This form of “wage theft” is exactly the type of harm that the FLSA was designed to prevent. The FLSA protects “the rights of those who toil, of those who sacrifice a full measure of their freedom and talents to the use and profit of others” (Tennessee Coal, Iron & R.R. Co. v Muscoda Local No. 123, 321 US 590, 597 [1944]). When Congress enacted the FLSA in 1938, it sought to protect workers from exploitation that occurs due to the unequal bargaining power between employers and employees (Tony & Susan Alamo Found. v Sec. of Labor, 471 US 290, 302 [1985]; Brooklyn Savings Bank v O'Neil, 324 US 697, 706-07 [1945]). Since the FLSA is “remedial and humanitarian in purpose” (Tennessee Coal, Iron & R.R. Co., 321 US at 597), “it has been construed liberally to apply to the furthest reaches consistent with congressional direction” (Mitchell v Lublin, McGaughy & Assocs., 358 US 207, 211 [1959]). The Supreme Court has long recognized “that broad coverage is essential to accomplish [its] goal” (Tony & Susan Alamo Found., 471 US at 296, citing Powell v United States Cartridge Co., 339 US 497, 516 [1950]). 14 The Act defines “employee” as “any individual employed by an employer” (29 USC § 203 [e]) and to “employ” as including “to suffer or permit to work” (id. at § 203 [g]). The Supreme Court has noted that “[a] broader or more comprehensive coverage of employees . . . would be difficult to frame” (United States v Rosenwasser, 323 US 360, 362 [1945]). Indeed, there is “no doubt as to the Congressional intention to include all employees within the scope of the Act unless specifically excluded” (id. at 363). FLSA coverage has been applied to a religious foundation that provided room, board, and clothing to former drug addicts in exchange for work, even where both the employer and the workers themselves characterized the workers as “volunteers” (Tony & Susan Alamo Found., 471 US at 300-02). FLSA protects individuals labeled as “independent contractors” when, as with Mr. Carver, the employer controls the hours of work and rate of pay (Brock v Superior Care, Inc., 840 F2d 1054, 1060 [2d Cir 1988]). Recently, FLSA coverage was applied to protect interns where the only training they received was being on the job (Glatt v Fox Searchlight Pictures Inc., 293 FRD 516, 531-34 [SD NY 2013], lv granted, No 11 CIV 6784 WHP, 2013 WL 5405696 [SD NY Sept. 17, 2013] (incidental benefits such as learning how an office works does not make the job a vocational training that would be an exception to FLSA)). B. Under the Economic Reality Test, Workfare Participants like Mr. Carver Are Employees for Purposes of the FLSA. In recognition of “the expansive nature of the FLSA’s definitional scope and 15 the remedial purpose underlying the legislation, courts construing this statute have adopted the ‘economic realities’ test, under which individuals are considered employees if ‘as a matter of economic reality [they] are dependent upon the business to which they render service’” (Frankel, 987 F2d at 89, quoting Bartels v Birmingham, 332 US 126, 130 [1947]). “An entity ‘suffers or permits’ an individual to work if, as a matter of ‘economic reality,’ the entity functions as the individual's employer” (Zheng v Liberty Apparel Co. Inc., 355 F3d 61, 66 [2d Cir 2003] (citations omitted)). The economic realities test considers the totality of the circumstances in each case (Tony & Susan Alamo Found., 471 US at 301; Rutherford Food Corp., 331 US at 730; Brock, 840 F2d at 1059). However, courts generally look to several factors which were originally set forth by the Supreme Court in United States v Silk (331 US 704, 716 [1947]) and are used to determine whether a worker is covered by the FLSA or “independent of all employers” (Zheng, 355 F3d at 68). These factors include: (1) the degree of control exercised by the employer over the worker; (2) the worker's opportunity for profit or loss and their investment in the business; (3) the degree of skill and independent initiative required to perform the work; (4) the permanence or duration of the working relationship; and (5) the extent to which the work is an integral part of the employer's business (Brock, 840 F2d at 1058-59, citing United States v Silk, 331 US at 716). 16 In applying these factors, it is a simple and straightforward task to show Mr. Carver was an employee under the FLSA when he worked at the Staten Island Ferry Terminal. With respect to the first factor, Mr. Carver was required to work virtually full time, 35 hours per week, and perform his assigned work or lose his only means of support, his public assistance benefits (SSL § 342; A. 5). Second, it is obvious there was no opportunity for individual entrepreneurial profit or loss when he carried out his maintenance assignments. Third, Mr. Carver received no training (A. 82), and his assigned work did not require any independent skill or initiative; there is no special skill required for picking up trash or throwing salt on wintertime walkways. With respect to the fourth factor, the record reveals that Mr. Carver worked virtually full-time every week at the Staten Island Ferry terminal, for five consecutive years (Carver, 87 AD3d at 27; A. 5, 81-82). Finally, Mr. Carver’s janitorial maintenance at the Ferry Terminal certainly contributed to the overall operation of the larger New York City public transportation network, connecting the two island boroughs of Manhattan and Staten Island. 8 The structure of the workfare program contains additional indicia of Mr. Carver’s FLSA employee status. For instance, the FLSA minimum wage rate was 8 The Staten Island Ferry website estimates that the ferry currently carries 70,000 daily passengers during the weekday (The Staten Island Ferry, http://www.siferry.com/ [accessed Dec. 3, 2014]). The New York City Department of Transportation (NYCDOT) estimated that there were 65,000 daily passengers in 2001 and that ridership was nearly flat from 1997-2001 (NYCDOT, Information on the Staten Island Ferry, available at https://www.dot.ny.gov/divisions/policy-and-strategy/public-trans-respository/sif_1.pdf [accessed Dec. 3, 2014]). 17 used to determine the number of hours Mr. Carver was required to work at the Ferry Terminal every month from 1997 to 2000 (SSL § 336-c [2] [b]; A. 115 (Guinn Aff., Ex. A (07-ADM-08, p. 11)); A. 223-224). Calculating the number of work hours at the minimum wage rate strongly suggests a traditional FLSA employer-employee relationship. And, just as all other Staten Island Ferry Terminal employees, Mr. Carver was covered by workers’ compensation when he worked at the Terminal (SSL §336-c [2] [e]; A. 151 (Guinn Aff., Ex. B (08-ADM- 07, p. A-3)). “Worker's compensation, of course is typically associated with employment” (City of New York, 359 F3d at 95-96). In short, the “totality of the circumstances” reveals that Mr. Carver was an “employee” and covered by the Fair Labor Standards Act when he worked at the Staten Island Ferry Terminal. Accordingly, the lower court decisions finding “that the petitioner was an employee within the meaning of the FLSA” should be affirmed (Carver, 87 AD3d at 33). C. Mr. Carver’s Status as a Workfare Recipient Does Not Preclude Him from Also Being an Employee Covered by the FLSA. Appellant asks this Court to make a broad finding that no workfare participants can be covered by the FLSA. This would contradict 75 years of established FLSA law and ignores the relevant factors used in determining whether a person is an employee under FLSA. Appellant offers a series of arguments 18 focusing on various general attributes of public assistance benefits but never addresses the economic reality test required by the FLSA; Mr. Carver was required to work to receive his public assistance grant and would have lost his grant if he failed to do so. Excluding entire classes of workers from the FLSA has been discouraged by the courts in favor of the economic reality test. For example, the Second Circuit, in rejecting the argument that prisoners could never be considered employees subject to the FLSA, stated that “[C]ourts should refrain from exempting a whole class of workers, based on technical labels . . . because such action would have the potential for upsetting the desired equilibrium in the workplace” (Carter v Dutchess Community College, 735 F2d 8, 13 [2d Cir 1984]). Furthermore, the court pointed out that since Congress had not expressly excluded prisoners from FLSA coverage, “[i]t would be an encroachment upon the legislative prerogative for a court to hold that a class of unlisted workers is excluded from the Act” (id., citing 29 USC § 213; see also Rosenwasser, 323 US at 363). 9 Appellant also contends that public assistance recipients are required to engage in work as training, not as employment, but the FLSA makes clear that whether its protections apply depend not on the label given the activity, but on the 9 Although the Second Circuit later modified Carter to exclude certain prison labor from FLSA coverage, the court reaffirmed that it would “continue to follow Carter in holding that prison labor is not in all circumstances exempt from the FLSA and that an economic reality test is to be used in determining whether payment of FLSA wages is required” (Danneskjold v Hausrath, 82 F3d 37, 44 [2d Cir 1996]). 19 nature of the work performed (Watson v Graves, 909 F2d 1549, 1554 [5th Cir 1990]; Brock, 840 F2d at 1059). Where an alleged trainee is performing productive work, the label assigned to the activity will not be determinative of the person’s status as an employee (McLaughlin v Ensley, 877 F2d 1207, 1209-10 [4th Cir 1989]; Archie v Grand Cent. Partnership, Inc., 997 F Supp 504, 534-35 [SD NY 1998]). Yet the Appellant has not pointed to any activity that Mr. Carver engaged in that could be labeled training. 10 The fact is that Mr. Carver never received any training before or during the five years he worked at the Staten Island Ferry Terminal (A. 82). Appellant also claims that since public assistance benefits are not subject to taxes customarily applied to wages, Mr. Carver cannot be considered an employee under the FLSA (App. Brf. at 37). Appellant cites no cases or authorities to suggest that the taxability of wages has any bearing on a FLSA determination. If this mattered, the fact that taxes were not withheld for volunteers and interns would have been factors in Tony & Susan Alamo Found. and Glatt. Appellant also argues that Johns v Stewart (57 F3d 1544 [10th Cir 1995]), which held that work experience workers in Utah were not covered by the FLSA, 10 The United States Department of Labor (USDOL) has issued specific guidance defining a “trainee” (USDOL, Fair Labor Standards Act Advisor on Trainees, http://www.dol.gov/elaws/esa/flsa/docs/trainees.asp [accessed Dec. 3, 2014]; see also Archie, 997 F Supp 504 at 531-33 (holding that the USDOL guidance is “entitled to deference” and while “it is not determinative . . . , it is a factor to be weighed in the analysis”). Although the Appellant alleges that Mr. Carver is a trainee, it points to no indicia specified in the guidance that would support such an allegation. 20 somehow provides persuasive legal analysis for the issues presented here (App. Brf. at 36-37). Both the Elwell court and the Second Circuit in City of New York considered Johns and then refused to follow its reasoning, in part because the Utah public assistance program required “participation in a broad range of adult education, short-term skills training, community work and job search and was therefore different than New York’s WEP and workfare programs (City of New York, 359 F3d at 94 (citation omitted); accord Elwell, 2007 WL 2994308 at *5). When making its determination, the Johns court relied on its own “either/or approach to employee status,” that “one must be a welfare recipient or an employee and cannot be both,” a conclusion emphatically rejected by the Second Circuit (City of New York, 359 F3d at 94, citing Johns, 57 F3d at 1558). The artificial economic rationale contrived by the Johns court fails to examine the “true economic reality of the employment relationship” (Frasier v General Electric Co., 930 F2d 1004, 1008 [2d Cir 1991] (citation and internal quotation marks omitted)), and the Second Circuit has expressly declined to follow this contrivance (City of New York, 359 F3d at 94). The Appellant claims that because the public assistance grant can be restricted to a few, specific purposes such as rent or fuel, it somehow means that Mr. Carver is not covered by the FLSA (App. Brf. at 38). Appellant does not allege that Mr. Carver’s actual grant was restricted in this manner but instead cites Johns 21 (App. Brf. at 37). To understand that wages paid in a restrictive manner or in kind has no effect on FLSA coverage, this Court need look no further than the United States Supreme Court’s decision in Tony & Susan Alamo Found., where “volunteers” received no cash and only food, clothing, and shelter, but were nonetheless deemed “employees” covered by the FLSA (Tony & Susan Alamo Found., 471 US at 301). The fact that public assistance grants can be restricted to certain expenses such as rent or fuel has no bearing on whether the FLSA applies to workfare participants. Relying again on Johns, the Appellant contends that Mr. Carver was not an employee because he was not “hired” (App. Brf. at 36). This argument is syllogistic; it was the City of New York who required Mr. Carver to work at the Staten Island Ferry Terminal in return for his public benefits (Carver, 87 AD3d at 33). Under the FLSA, workers can demonstrate that they have been “hired” when they demonstrate that they “receive remuneration” for their work. City of New York expressly holds that WEP workers have met the “hired” test because they work in exchange for their benefits. (See City of New York, 359 F3d at 92.) The Appellant concedes that individuals in work experience may “work alongside employees and perform similar tasks” but concludes that because WEP participants are “prohibited from performing a substantial portion of the work ordinarily and actually performed by regular employees,” they are not covered by 22 FLSA (App. Brf. at 38). However, WEP participants were frequently assigned work that was previously performed by City employees. Despite workfare’s anti- displacement provisions, the City of New York has reduced its paid workforce by replacing those who have left through attrition by using workfare participants. (Nan S. Ellis, Work Is Its Own Reward: Are Workfare Participants Employees Entitled To Protection Under The Fair Labor Standards Act?, 13 Cornell J L & Pub Policy 1, 20-21[2003].) Between 1990 and 1999 the number of unionized New York City Park workers declined 50%, from 1,553 workers to 803 workers, attributed directly to WEP workers assigned to work in the parks (Laura Wernick, John Krinsky, Paul Getsos, Community Voices Heard, WEP: New York City’s Public Sector Sweatshop Economy, 17, available at http://cvh.mayfirst.org/files/WEP%20Work%20Experience%20Program.pdf [accessed Dec. 3, 2014]). 11 The anti-displacements provisions of the statute do not provide any support for exempting Mr. Carver’s work from FLSA coverage. 11 See also Steven Greenhouse, Many Participants in Workfare Take the Place of City Workers, NY Times, Apr. 13, 1998, 1, available at http://www.nytimes.com/1998/04/13/nyregion/many- participants-in-workfare-take-the-place-of-city-workers.html [accessed Dec. 3, 2014] (reporting that it is “clear that many [WEP] participants have taken the place of city workers, . . . doing much of the work once performed by departed city employees, [and] in many instances, . . . doing the same work as current ones.”). For instance, from 1994 to 1998, the City Parks Department's regular maintenance staff fell 40%, with “[t]he void . . . filled by more than 6,000 workfare participants, who rake leaves, pick up trash and do other tasks” (id.). The displacement of paid City employees by WEP workers has been a contentious issue resulting in litigation (e.g. Melish v City of NY, 7 Misc 3d 1009(A) [Sup Ct, NY County 2005]). 23 The Appellant also argues that Mr. Carver’s grant size would have been the same whether or not he engaged in WEP (App. Brf. at 35), and suggests (but does not explain why) this is a reason for not considering him a FLSA employee. For purposes of FLSA analysis, the obligations of other public assistance recipients are irrelevant; the focus is on the work activities of Mr. Carver and WEP participants. Comparing Mr. Carver to public assistance recipients who do not work actually strengthens the argument for crediting the value of his work. Recipients of public assistance who engage in workfare and those who do not should not incur an equal amount of public assistance debt; otherwise Mr. Carver’s years of toil at the Ferry Terminal are valued at nothing. This failure to credit work is not only a violation of the FLSA; 12 it also defies all sense of equity and fairness that the debt of the workfare worker is not reduced. Similarly, the Appellant also contends that Mr. Carver is not an employee under the FLSA because he could not earn more compensation by working additional hours (App. Brf. at 35). However, the whole purpose of the Act is to ensure that employees receive a minimum level of compensation for their actual 12 Requiring an employee to repay “the whole or part of the wage delivered to an employee” is considered an illegal kickback under the FLSA (Castillo v Case Farms of Ohio, Inc., 96 F Supp 2d 578, 637 [WD Tex 1999]). The wage payment requirements of the Act will not be met when an employee “kicks back” directly or indirectly to the employer- or to another person for the employer’s benefit- all or part of the wages delivered to the employee (Marshall v Quick-Trip Corp., 672 F2d 801, 807 [10th Cir 1982]; see Mayhue's Super Liquor Stores, Inc. v Hodgson, 464 F2d 1196, 1199 [5th Cir 1972]; Teoba v Trugreen Landcare LLC, 769 F Supp 2d 175, 180 [WD NY 2011]; Morangelli v Chemed Corp., 922 F Supp 2d 278, 299 [ED NY 2013] recon denied in part, No. 10 CIV. 0876 BMC, 2013 WL 1212790 [ED NY Mar. 25, 2013]). 24 work performed (29 USC § 202; Tony & Susan Alamo Found., 471 US at 296 (citation omitted); Rutherford Food Corp., 331 US at 727). Nothing in the statute or case law requires that a worker have the opportunity to earn more compensation in order to be considered an “employee” under the Act. For five years, Mr. Carver labored to ensure that the Staten Island Ferry Terminal was clean and safe for the tens of thousands of daily commuters 13 by performing tasks such as sweeping, picking up trash, and salting walkways in the winter (A 5, 9-10, 12, 81-82). Mr. Carver’s work was obviously useful to the City of New York because in order for him to receive his workfare benefits, Mr. Carver was required to perform useful work (SSL § 336-c [2] [b]). The janitorial and maintenance duties performed by Mr. Carver and other workfare workers clearly benefited the City in its operation of the terminal, and the cleanliness of the City. In 1997, the Mayor of the City of New York reported that “[the City] increase[d] the number of . . . WEP Participants assigned to street cleaning, from fewer than 50 per day in July 1995 to a current [1997] daily average of 700 or more” (Mayor's Office of Operations, Final Fiscal Year 1997 Mayor's Management Report Summary Volume 67 [1997], 15 available at http://www.nyc.gov/html/ops/downloads/pdf/mmr/0997_summary.pdf [accessed Dec. 3, 2014]). The report further states: 13 See footnote 8, supra at 16. 25 During Fiscal 1997 an average of 83.2 percent of the City's streets were rated acceptably clean, the highest annual Scorecard rating achieved by the Department of Sanitation in the 23-year history of the program . . . These unprecedented improvements were made possible through the assistance of more than 700 WEP participants. (Id. at 67.) Providing a clean and safe environment in a highly trafficked urban transportation hub is necessary for the City to maintain the health and well-being of the public. Moreover, Mr. Carver’s work ensured that the City was protecting itself from any liability that could result from dangerous conditions such as black ice on the walkways during the winter. Appellant’s litany of arguments focuses on attributes of public assistance grants, but never addresses the core economic reality test required by FLSA. Mr. Carver was required to work for his grant; and if he did not work, he did not get paid. The Second Department correctly decided that Mr. Carver is entitled to the protections of the FLSA and the decision below should be upheld. D. The Appellant’s Reliance on Brukhman Is Misplaced. Seventy two years ago, in a dispute over Workers’ Compensation benefits, this Court held that workfare workers are “employees” when they are required to work as a condition of receiving public assistance (Maiceo, 263 AD 914). Nevertheless, Appellant urges this Court to find that workfare workers are not employees, citing Brukhman v Giuliani, (94 NY2d 387 [2000]). The analysis in Brukhman has no bearing on the issue of whether Mr. Carver was an employee 26 under the FLSA. Brukhman was a prevailing wage case and turned on the definition of “public work,” a “constitutional term of art” (id. at 393) and whether the agencies to which workfare workers were assigned qualified as “contractors or subcontractors” under the New York Constitution, article I, § 17. Brukhman involved a challenge to the number of hours assigned to a New York City workfare participant, and whether the number of required work hours should be based on the prevailing wage provision of the New York Constitution, Article I, § 17. The Court did not consider or evaluate the application of the FLSA to the WEP program. Instead, the Brukhman Court determined whether WEP met the definition of “public work” to qualify for prevailing wage protections under the State Constitution. Indeed, there is not a single mention of the FLSA in the Brukhman decision cited so heavily by the Appellant. The prevailing wage provisions of the New York State Constitution are narrowly constructed and subject to a particular three prong test to determine if the work can be construed as “public work” entitling the worker to a higher prevailing wage. First, a public agency must be a party to a contract involving the employment of laborers, workers, or mechanics. Second, the contract must concern a project that primarily involves construction-like labor and is paid for by public funds. Third, the primary objective or function of the work product must be the use 27 or other benefit of the general public. (De La Cruz v Caddell Dry Dock & Repair Co., Inc., 21 NY3d 530, 538 [2013].) The plaintiffs in Brukhman (who would otherwise be required to work for their benefits at the minimum wage rate (SSL § 336-c [2] [b])) sought a higher rate of compensation under the State’s prevailing wage provisions for WEP workers. The Court declined to apply the constitutional prevailing wage protections to workfare workers because their work fell outside the “limited boundaries of the constitutional provision at issue.” (Brukhman, 94 NY2d at 395). In contrast, Mr. Carver’s claims arising under the FLSA were properly analyzed and subject to the broad construction afforded that statute as discussed supra at 6-7. The decision reached by the Second Department (Carver, 87 AD3d 25) should be upheld. The analysis in Brukhman, a case construing only the inapplicability of the New York prevailing wage provisions with regard to WEP, is not relevant to the applicability of FLSA protections to Mr. Carver’s work under WEP. E. Federal Administrative Guidance Expressly States that FLSA Applies to Workfare and Congress Acknowledged this Guidance in Subsequent PRWORA Amendments. The Appellant suggests, but never explains why the definition of “work experience” in the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 and its corresponding regulations should somehow affect 28 the outcome of this case. 14 Although the Appellant contends that the PRWORA defines work experience as “vocational activity” (App. Brf. at 9), the PRWORA in fact lists “work experience” and vocational training as two separate activities. 15 Then, citing to its own administrative guidance (App. Brf. at 9, citing A. 161-62), Appellant states “[w]ork experience provides participants with an opportunity to acquire the general skills, training, knowledge and work habits necessary to obtain employment,” but does not explain, because it cannot, why this should undermine its characterization as work. Appellant’s argument is directly controverted by guidance issued by the United States Department of Health and Human Services (HHS) and the United States Department of Labor. These agencies, which respectively govern the administration of the TANF program and the FLSA, have made clear that the FLSA applies to TANF recipients. In particular, HHS regulations state that [t]he limitation on Federal regulatory and enforcement authority at section 417 of the Act does not limit the effect of other Federal laws, 14 The PRWORA created the federal Temporary Assistance to Needy Families (TANF) Block Grant, (42 USC § 601 et seq.), and applies to recipients who receive benefits under that program. Mr. Carver was not a recipient of federally funded TANF benefits; his cash public assistance benefits consisted solely of State and local funds under the New York State Safety Net Assistance Program (A. 100 (Schollenberger Aff. ¶ 7)). However, as noted in City of New York, the New York State work requirements apply to both federally funded TANF households and those in Safety Net households, like Mr. Carver’s, that only receive state funding (City of New York, 359 F3d at 88). Since the definition of work experience in SSL § 336-c applies both to individuals receiving TANF and Safety Net Assistance, the analysis for purposes of FLSA applies regardless of whether the workfare is performed by a TANF recipient or a Safety Net recipient. 15 PRWORA lists twelve activities as “work activities” and “work experience” is one of them (42 USC § 607 [d] [4]). 29 including Federal employment laws (such as the Fair Labor Standards Act (FLSA), the Occupational Safety and Health Act (OSHA) and unemployment insurance (UI)) and nondiscrimination laws. These laws apply to TANF beneficiaries in the same manner as they apply to other workers. (45 CFR § 260.35 [b] (emphasis added)). In 1997, the United States Department of Labor (USDOL), the agency responsible for enforcing the FLSA, published a guidance document entitled “How Workplace Laws Apply to Welfare Recipients.” The guidance specially addresses how the FLSA applies to welfare recipients: Federal employment laws, such as the Fair Labor Standards Act (FLSA), the Occupational Safety and Health Act (OSHA), Unemployment Insurance, and anti-discrimination laws apply to welfare recipients as they apply to other workers. The new welfare law does not exempt welfare recipients from these laws. (United States Department of Labor, How Workplace Laws Apply to Welfare Recipients at Q & A No. 1 [May 1997, revised Feb 1999], (emphasis added), attached hereto as Exhibit B; see also City of New York, 359 F3d at 99-100, quoting this guidance.) Congress acknowledged this guidance when amending PRWORA in 1997. As part of the 1997 amendments to PRWORA authorizing welfare to work grants, the House Conference report set forth the “Workfare Rules” applying to “Work Experience Programs” such as the one that employed Mr. Carver: 30 CURRENT LAW States may establish work experience and community service programs in which TANF recipients may be required to work as a condition of receiving their grant. These programs are often called “workfare.” The Department of Labor has held that workfare participants may be considered “employees” and thus would be covered by the Fair Labor Standards Act (FLSA), which sets hour and wage standards, and other employment laws. (HR Conf Rep 217, 105th Cong, 1st Sess at 934, reprinted in 1997 US Code Cong & Admin News at 176, 555 [hereinafter HR Conf Rep 105-217].) This direct reference to the USDOL Guidance in the Conference Committee Report reveals the Congress was fully aware that the FLSA applies to workfare participants in the same way that the statute applies to all other workers. The House version of the bill specifically sought to exclude workfare recipients from FLSA coverage. The House version of the bill provided: Participants engaged in work experience and community service programs are not entitled to a salary or work or training expenses and are not entitled to any other compensation for work performed. (Id.) As the Second Circuit has noted, the conference committee’s rejection of “the House’s effort to override the DOL’s interpretation” is highly significant because “[t]he failure of Congress to act when it had knowledge of DOL’s interpretation suggests that DOL’s interpretation is correct” (City of New York, 359 F3d at 99- 100, citing HR Conf Rep 105-217 at 934; cf. North Haven Board of Education v Bell, 456 US 512, 529 [1982] (citation omitted) (“[D]eletion of a provision by a 31 conference committee ‘militates against a judgment that Congress intended a result that it expressly declined to enact.’”)). The bill accompanying the conference committee report was passed by the House on July 30, 1997 and by the Senate on July 31, 1997 (143 Cong Rec H6342 [July 30, 1997]; 143 Cong Rec S8386-8410 [July 31, 1997]). President Clinton signed the bill into law on August 5, 1997, as Public Law 105-33, the Balanced Budget Act of 1997 (111 Stat. 606). As the legislative history makes clear, federal welfare reform changed nothing with respect to workfare and the FLSA. Workfare participants who are employees as defined under the FLSA and who work for their benefits have been and are now entitled to be paid minimum wage for their work. CONCLUSION The Second Department correctly decided that Mr. Carver was entitled to the protections of the Fair Labor Standards Act. By 1997, the first year covered by the lottery intercept at issue in this case, Mr. Carver had already worked at the Staten Island Ferry Terminal for two years; it defies logic that he would only be “acquiring skills” and not performing useful work. Mr. Carver’s skills were acquired early on, and the City of New York directly benefitted from his labor. Mr. Carver’s work meets the FLSA “economic reality test.” He was required to perform useful work benefitting the City of New York for 35 hours per week and if he failed to do so, he would not receive his public assistance benefits. His 32 statuses as a workfare recipient and as an “employee” for FLSA purposes are not mutually exclusive. Two relevant federal agencies, the United States Department of Labor and the United States Department of Health and Human Services have concluded that workfare workers like Mr. Carver are entitled to the protections of the FLSA. To require Mr. Carver to repay a wage that has already been delivered to him is a gross injustice and a violation of the FLSA. Both the decision of the Appellate Division and the decision of the Supreme Court of Kings County on remand should be affirmed. Dated: December 8, 2014 EMPIRE JUSTICE CENTER ____________________________ Susan C. Antos, of counsel Saima A. Akhtar, of counsel Raymond Burke, law graduate on the Memorandum of Law 119 Washington Ave. 3rd floor Albany, NY 12210 Tel. (518) 935-2845 santos@empirejustice.org Peter O. Dellinger, of counsel Bryan D. Hetherington, of counsel One West Main St., Suite 200 Rochester, New York 14604 Telephone: (585) 295-5809 Elwell v. Weiss, Not Reported in F.Supp.2d (2006). •' . ~. 2007WL 2994308 Only the Westlaw citation is currently available. United States District Court, W.D. New York. Steven P. ELWELL, Plaintiff, v. William J. WEISS, Individually and in his Official Capacizy as Commissioner ofthe Schuyler Counfy Department of Social Services, and the Schuyler Counzy Department of Social Services, Defendants. No. 03-CV-6121. Sept. 29, 2006. DECISION AND ORDER JONATHAN W. FELDMAN, United States Magistrate Judge. Preliminary Statement *l Before the Court are cross-motiODB fur summary judgment filed by plaintiff Steven Elwell (Docket# 21) and defendants Weiss and the Schuyler County Department of Social Services (Docket# 25). The parties have consented to proceed before this Court for all proceedings including the entry of judgment in accordance with 28 U.S.C. § 636(c). (Docket # 11 ). The primary issue presented is whether plaintiff Steven Elwell (hereafter "Elwell" or "plaintiff'), a former recipient of public assistance, is entitled to the wage protections of the Fair Labor Standsrds Act (FLSA) for time he spent performing "work activities" required to receive his welfare benefits. Factual Background TM' PRWORA: In 1996, the United States Congress enacted the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). The PRWORA established a new federally-funded welfare program replacing the Aid to Families witlr Dependent Children program. One of the express purposes of the new PR WORA statute was to "end the dependence 'of needy parents on government benefits by promoting job preparation [and] work." 42 U.S.C. § 60!(a) (2). --------------- To be eligible;·for federal grants to fund state welfare programs, the PRWORA required states to ensure that a certain percentage of welfare recipients participate in "work activities" intended to assist them in achieving economic independence. These activities include, inter alla, subsidized and unsubsidized empfoyment, on-the-job training, vocational educa4on, job search andjob readiness . activities, job training activities and education relating to employment. 42 U.S.C. § 607(d)(l)-(12). To receive federal· funds, a state must subrnit'a plan to the Secretary of Health and Human Services that complies With the PRWORA . requirements. In 1997, New York State.enacted a welfare.refonn statute that complied with the PRWORA requirements. N.Y. Soc. Serv. L. § 331 et seq. (McKinney 2005). The statute's reforms · included a requirement that public assistance recipients engage in "work activities" in return for their benefits. Requiring "work activities" was intended to assist those individuals receiving public assistance in being able to secure non-subsidized employment and ''achieve economic independence." Id at § 331(1). Among other things, the legislation authorized local social services offices to establish Work Experience Programs (WEP). Id. at § 336-~ WEP "may include the performani:e of work for a federal office or agency, county, city, Village or town or for the state or in the operation of or in an activity of a nonprofit agency or institution." Id As a condition of receiving public assistance benefits, local social services offices may require participation in WEP unless the welfare recipient can demonstrate that illness, age, disability or other adverse condition entitles the recipient to an exemption. Id. at§ 332 & 332-b. Under the New York scheme, local social services personnel are charged with detennining the number of hours the recipient is required to work in WEP and assign the individual to a specific work activity. The number of hours an individual must work in WEP is computed by dividing the amount of assistance payable to the recipient (including the value of food stamps) by the higher of the federal or state minimum wage. Id at§ 336-c(2)(b). 33 *2 StID>en Elwell: Shortly after becoming a resident of Schuyler County in 1997, plaintiff Steven Elwell applied for public assistance from the defendants. See Affidavit of Steven Elwell, 1f 3 (Docket#24). OnAugcst I, 1997, the defendants determined that Elwell was eligible for public assistance, including food starops. Id at 1f 4. ln September 1997,E!well was infonned that the defendants considered him to be employable and therefore he was re.quired to participate in ---- ; r· ,-, ... ~_ ..... : " - ,., :: Elwell v. Weiss, Not Reported in F.Supp.2d (2006) WEP ''work activities'''in order to maintain his benefits. Id at 'II· 5. Based on a benefit calculation, Elwell was notified that he was required to work 18 public assistance hours and 5 food stamp hours, per week. See Plaintiff's Exhibit "F." Between September 1997 aud May 2000, defendants redetemtlned on multiple occasions Elwell's status as an "employable recipienf' of public assistance benefits and his required hours of work wer~ accordingly adjusted based on the amount ofhis benefits. Id The ''work activity" defendants required plaintiff to participate in was the Schuyler County "Mobile Work Crew." See Plaintiff's Affidavit, 11 7. As a member of the Mobile Work Crew, Elwell weol to go to locations within the County and perfonn various manual labor work assignments, including ''digging ditches and carrying drywall, building picnic tables, sorting paper clips, straightening nails, mopping floors, cleaning kitchens, painting, unloading food supplies from a truck for a food pantry, washing Schuyler County cars, boats, fire trucks and windows, as well as gardening, and moving furniture." Id at1f 18. Plaintiff had medical problems, including back, hip and leg ailments, which would often prevent him from working. Id. at 'If 2, 8. lnMay 1999, plaintiff injured his back while working with the Mobile Work Crew and was tiken to the hospital for treatment. Id at 1J 15-!6. Elwell avers that the County Department of Social Services "filed a worker's comp claim and I was excused from working with the Mobile Work Crew until mid-August 1999." Id. at '1117. Due to his various medical problems, Elwell applied for (and was repeatedly denied) Supplemental Security Income (SS!) disability benefits. Id. at 'II 22-23. Nevertheless, as part of defendants' bi-annual "recertification" process to maintain benefits, Elwell was required to sign an authorization allowing defendants to "recaptore" from any SSI benefits later determined to be due him the amount of his public assistance. See Defendants' Statement ofFacts, 'I! 7 (Docket# 25); Plaintiffs' Exhibit "E" at page 8. On May JO, 2001, Elwell was found by an Administrative Law Judge to be disabled from gainful employment as of February 15, 2000, and hence, eligible for SSI benefits retroactive to March 2000. See Defendants' Statement of Facts, 1f 7. Elwell began receiving monthly SS! checks in July 2001. See Plaintiff's Affidavit, 'If 2. In August 2001, defendants calculated that during the period from March 2000 through June 2001 (the period of time that Elwell's SS! application was pending), Elwell received $5,501.10 . ·:'~, .. i I::·· :~..Je~::t 3<1 in '1uiterim- assistance111 from defendants and reimbursed itself that amonnt from Elwell's retroactive SS! benefits. See Defendants' Statement of Facts,~ 8. *3 The instant lawsuit stems from Elwell's claim that "[w]hen detennining the amount of money owec;l by the' plaintiff in repayment of his interim assistance, DSs did not consider the value of any of the work plaintiff performed while a member of the Mobile Work Crew." See Plaintiff's Statement of Undisputed Facts, ~ 49 (Docket # 23). Both· parties agree that Elwell performed sixty hours Of Work as a member of the Mobile Work Crew during the months of April and May 2000. Id. at~ 107. Elwell claims that he qualifies as an employee under the FLSA and defendants owe him minimum wages for the work be perfonned for them. See Affidavit of Peter O'BrianDellinger, Esq., '1111-12 (Docket # 24). By retaining a portion of his retroactive SS! benefits, Elwell argues that defendants are, in effect, requiring him to repay minim1un wages he Jawfolly was entitled to retain. At the applicable federal minimum wage rate of $5.15 per hour, Elwell asserts he earned a total of$309.00 in wages from the defendants in interim assistance benefits which defendants should not have deducted from his retroactive SS! benefits. Id. at~ 17. Defendants dispute plaintiff's claims and assert that they are entitled to summary judgment. Defendants argue that Elwell's FLSA claim is barred by the two year statute of limitations and is substantively baseless because Elwell's WEP participation is not employment under the FLSA. Defendants also claim they are entitled to Eleventh Amendment immnnity because at all relevant times they were acting as agents of the State ofNew York. Discussion J. Applicability of the FLSA: Based on the cuneot state of the law within this Circuit, and the undisputed factual record as to the natore of the work Elwell was required to perform as a member of the Mobile Work Crew, I find that plaintiff is entitled to the protections of the FLSA. Jn making this determination, the Court is bound to apply the holding and reasoning of the Second Circuit's deCision in United States v. City ofNew York, 359 F .3d 83 (2d Cir.2004). In City of New York, the Second Circuit detennined that welfare recipients "obliged to participate in New York City's Work Experience Program (WEP) are employees within the meaning of Title VII." United States v. City of New York, 359 F.3dat86 . l- Elwell v. Weiss, Nat Reported in F.Supp.2d (2006) Although ilie holding in City of New York concerned Title VlI and not the FLSA, ilie facis and the Court's analysis are instructive here. The City of New York plaintiffs were all public assistance recipients whose banefits were contingent upon partjcipatian in ilie city's WEP program. Their work assigJlll)e~ts varied and included general office work, a maintenaoce job, clerical work and a job in the New Yark City Parks Department. Ali claimed race discrimination or sexual h'1'assment occurred during ilieir WEP particip~tion and thereafter sued the City in federal district court pursuant to Title VII. The district judge granted defendants' motion ta dismiss finding iliat ilie plaintiffs were not employees of the Cjty. In deciding that the WEP workers were not employees, the lower court relied, inter a/ia, on ilie fact that the plaintiffs (I) were not "hired" by the City, (2) did not receive typical employment-related benefits (i.e., health insurance, sick pay, pension benefits) and (3) the benefits that plaintiffs did receive resulted solely from ilieir status as welfare recipients and not as employees. Id. at 90-91. *4 In reversing the district court, the Second Circuit focused on the defmition of an employee under Title VII. Because the definition of "employee" used in Title VlI itself is somewhat circular (an employee is "an individual employed by an employer"), the CoUrt noted that it had histnrically relied on the federal common law principles of agency to ascertain the existence of an employment relationship. Id. at 92. See also O'Connor v. Davis, 126 F.3d 112, 115 (2d Cir.1997). The factors required to be considered include: (I) the hiring par(y's right to control the manner and means by which the product is accomplished; (2) the method of payment and whether the hiring party is in business; (3) the skill required; ( 4) the duration of ilie relationship between ilie parties and (5) whether the work is part of ilie regular bnsiness of the hiring party. UnitedStatesv. CityofNew York, 359F.3dat92, citing Community for CreativeNon-violencev. Reid, 490 U.S. 730, 751-52, 109 S.ct. 2166, 104 L.Ed.2d 811 (1989). The Second Circuit noted ilia! it places ''the greatest emphasis" on the extent to which ilie hiring party controls the manner by which the worker completes his assigned tasks. Id. The Court in City of New York concluded that a "functional commonsense assessment of the plaintiffs' alleged relationship wiili the city results in ilie conclusion that they were employees." Id. at 92. As set forth below, what makes the City of New York case so persuasive here is that the Second Circuit's analysis in finding an employment relationship in New York's WEP program is every bit as applicable and cqmpelling to Elwell's relationship with the County of Schuyler WEP program. First, ilie plaintiffs' work in New York City's WEP was "completely controlled by ilievarious agencies forwbich they worked." Id. at 92. Similarly, iliere is no re"1 dispute here that the defendants controlled the ''manner an4· rneans" by which Elwell was assigned tasks as a member of the Mobile Work Crew.· Second, like the defendants here, New York City argned that because WEP workers received no "renumeration" or wages for their work, they could not be considered employees. In explicitly rejecting ilia! argument, the Court found that the WEP workers received substantial benefits in return for their work for the City and, indeed, had to work in order to receive welfare benefits. Particularly relevant to the Court was the fact that the calculation used by the City tu ascertain the plaintiffs' WEP work obligation was made by multiplying the number of hours times the minimum wage, "an all too typical way ofcalculating compensatioit for work." Id. at 96. Third, the Court found the fact that New York's WEP workers were covered by workers' compensation was indicative of an employer-employee relationship. "Workers' compensation, of course, is typically associated with employment." Id. at 95. Elwell was also covered by workers' compensation during his assigmnentto ilie Mobile Work Crew and, in fact, was iajnred on the job and filed a compensation clairo. *5 Fourth,. in discerning a congressional intent that the protections of Title VlI apply to PRWORA participants, ilie Second Circuit discussed and relied upon an aspect of ilie legislative history of the PRWORA that supports congressionsl intent to apply the protections of the FLSA to PRWORA participants. In enacting amendments to the PRWORA in 1997, the House Conference Report referenced WEP programs such as the one at issue here. The Report cited the Department of Labor's (DOL) position that participants in ''workfare" programs like WEP (whererecipientsarereqnired to work as a condition of receiving their grant) "iwould be covered by the Fair Labor Standards Act (FLSA)" and "other employment laws." R.R. Conf. Rep. No. 105-217, at 934. (emphasis added). The Court noted ilia! the House version of the bill specifically sought to "override the DOL's interPretation" and exclude ''workfare" recipients from the protections of the FLSA, but was unsuccessful. The Second Circuit found this legislative history to be sigoifLcant: "The failure of Congress to act when it had koowledge ofDOL's . -, ~. ·-. •, . 35 Elwell v. Weiss, Not Reported in F.Supp.2d (2006) interpretation suggests that DOL 's interpretation is correct. " Id at 100. (emphasis added). Finally, the cases the City unsuccessfully relied on in the City of New York case are the same cases defendants rely on here. In Johns v. Stewart, 57 F.3d 1544 (10th Cir.1995), the court found that participants in a Utah l'ublic assistance program that preceded the enactment of PRWORA were not employees within the meaning of the FLSA. The Utab pro gram required recipients to participate in a variety of tasks as a condition of receiving benefits, including adult education, skills training, community work and job search activities. To be sure, in distinguishing Johns, the Second Circuit did state that "Johns is not a Title VII case." United'States v. City 1'J- New York, 359 F.3d at 94. But the Court further reasoned that "even with respect to the ·statute Johns does construe, the FLSA, the Department of Labor (DOL), the agency charged with interpreting the FLSA, has rejected the Johns approach." Id See also Stone v. McGowan, 308 F .Supp.2d 79, 86 (N.D.N.Y.2004) (In City of New York decision, Second Circuit"specificallycastdoubton the sounclness ofJohns and suggested that it would have decided the issue differently."). In addition, in contrast to both the plaintiffs in City of New York end Steven Elwell here, the Second Circuit noted there was no indicationinJohns that the "participantswerereqnired to perform useful work" in order to receive benefits. The Second Circuit reiterated its view that it is nature of the duties performed that is often determinative of employment status and thatit has never been an "all or nothing" analysis. "[W]e recognize that a person may be an employee with respect to certain of bis duties and may not be an employee with respect to others." United States v. City of New York, 359 F.3d at 94. Plaintiff here concedes as much, 2 but argues that it is the defendants' refusal to consider the value of any of the work he performed as a member of the Mobile Work Crew which offends the FLSA. I agree. Had the record before this Court shown plaintiff was assigned WEP tasks that were directed towards on-the-job training, vocational education or skills development, the Court's determination would have been different. See Williams v. Strickland, 87 F.3d 1064, 1067 (9th Cir.1996) (residents of drug and alcohol rehabilitation centers run by the Salvation Army were not employees under the FLSA where their relationship with the Salvation Anny was predominately rehabilitative in nature). But frankly, it is difficult to convince this Court (and defendants do not seriously argue) that the purpose of a program which requires a beneficiary like Elwell to wash county cars, dig ditches, carry drywall, mop floors, clean kitchens, .Paint wa!IS, move furniture and unload tiucks as a condition' of receiving public assistance benefits is predominately rehabilitative or specifically designed to help him achieve economic independence. As to the City of New York decision itself; the defendants argue it is distinguishable for two reasons. First, defendants claim that the "Title VII 'employment' test is significantly different than the FLSA 'employment' 'test." See Defendants' Memorandurn'of Law (Docket# 26) at page 15. I disagree. I conclude fuat the multi-factored '.'economicreality" test set forth by the Second Circuit in Brock v. Superior Care, Inc., 840 F.2d 1054 (2d Cir.1988) provides the appropriate guideposts in determining an individual's statns under the FLSA. While the court must not isolate factnrs and instead should examine the totality of circumstances presented, it is important to note that each of the five factors identified in Superior Care are also found in the multi-factored test the Second Circuit used to determine whether WEP workers were employees under Title VII. As set forth infra, this Court has found those factors support a findiog that Elwell was an employee. Indeed, as noted by Judge Jacobs ill his dissent in the City of New York case, "the definition of 'employee' in the FLSA is considerably more inclusive than the common law definition used in Title VIL" United States v. City of New York, 359 F.3d at 108. See generally Ellis, Work is its Own Reward: Are Workfare Participants Employees Entitled to Protection Under the Fair Labor Standards Act?, 13 Cornell J.L. & Pub. Policy I, 27 (2003) (concluding that workfare participants should be afforded the protections of the FLSA "from both a statutory and a public policy perspective."). *6 Defendants also argue that City of New York is not persuasive here because "permitting WEP participants to obtain redress of actionable discrimination under Title VII is consistentwith the purpose of the WelfareRefonnAc~ while redress under FLSA is not." See Defendants' Memorandum of Law (Docket # 26) at page 15. In this regard, however, the defendants' argwnent 1uns counter to the clear position of the United States Department of Labor (and noted by the Court in City of New York ) that the FLSA does not exclude workfare participants from its protections.See United States Department of Labor, How Workplace Laws Apply to Welfare Recipients, at Q & A No. 1 (May 1997, revised Feb. 1999) ("The new welfare law does not exempt welfare recipients from [the FLSA]"). In sum, like the Court in City of New Yorlc, I find that a "functional comroonsense assessment of the plaintiffs' alleged relationship" with the Schuyler County Department of Social Services "r~ults in .. - • 7. -.,-.=-,_.,, 36 Elwell v. Weiss, Not Reported in F.Supp.2d (2006) the conclusion" that Elwell was an employee. United States v. City of New York, 359 F.3d at 92. 3 Having detennined that the Second Circuit's analysis in City of New York compels the conclusion that Elwell was an employee within the meaning of the FLSA, the· Court turns now to what effect that deteIIDination has on plaintiff's ·retroactive SSI benefits. The FLSA makes it uiilawful for any employer to deny any employee payment of the -lawful minimum wage. See 29 U.S.C. § 206. Because defendants never considered plalntiff to be an employee within the meaning of the FLSA, they logically never considered any work plaintiff completed as a member of the Mobile Work Crew to be snbject to the FLSA's minimum wage requiremen!S. Thus, defendants do not dispute that in detennining the amount of money owed by Elwell in repayment of bis interim assistance (assistance paid while his SS! application was pending), DSS did not consider the value of any of the work Elwell perfonned as a member of . the Mobile Work Crew. See Defendant's Amended Response Number 97 to Plaintif!'s First Requests For Admissions, aonexed as exhibit "B" to Docket # 24. Recognizing the Second Circuit's determination that one can be a welfare recipient and an employee, (City of New York; supra at 94), I conclude that Elwell was entitled to FLSA minimum wages for the labor he was required to complete as a member of the · Mobile Work Crew and that the minimum wage value of that labor shouldnothave been taken fromElwell's SS! retroactive benefits. Defendants argue that even accepting "for the sake of argumenf' that plaintiff was an employee under theFLSA, he is certainly not entitled to both SS! benefits and a ''minimum wage" for the period of time at issue here. See Defendants' Memorandum of Law (Docket# 26) at pages 9-10. This Court does not agree that plaintiff is trying to "double dip." The fact that the Social Security Administration found plaintiff to be disabled and therefore legally entitled to retroactive SS! benefits does not operate to relieve an employer from paying minimum wage for work perfonned during the period of time the SS! application was pending. Nor should an employer be able to reimburse itself for FLSA wages previously earned by an employee out of an award the employee receives under a separate and distinct disability entitlement. In this regard, I note that prior to the 1997 welfare reforms enacted by the State of New York, it was the policy of the State to credit SS! recipients for work perfonned on public works projects when calculating the amount of reimbursement owed from the interim assistance. See generally November 14, 2005 Affidavit of Susan C. Antos, Esq. (Exhibit "B" ta· Docket # ,. 30) at pages 2-4 and Exhibits "A" and ''B" annexed thereto;· • *7 2. Statute of Limitations: Defendants seek dismissal of Mr. Elwell's substantive FLSA claim as barred by the statute oflimitations. According to 29 U.S.C. § 255, the statnte of limitations for an FLSA claim is two years after the caiise of action has accrued, unless a willful violation is alle~ed, in which case the plaintiff has three years to bring a lawsuit. Herman v. RSR Security Services, Ltd, 172 F.3d 132, 141 (2d Cir.1999); Reich v. Waldbaum, Inc., 52 F.3d 35, 40 (2d Cir.1995). A cause of action accrues when there is a breach of duty owed. Ramey v. District 141, Intern. Ass'n of Machinists and Aerospace Workers, 378 F.3d 269, 279 (2d Cir.20"04) ("statute of limitations ordinarily does not begin to run, and the cause ofaction does not accrue, until the date of the actnal breach"). Her~ contrmy to defendants' claim that the alleged breach occurred on May 18, 2000, which was Mr. Elwell's "last day of WEP participation" (see Defendants' Memorandum of Law at page 6 (Docket# 26)), it is evident that alleged breach occurred on November 20, 2001, when Mr. Elwell was notified thatthe County and State had reimbursed themselves for his interim assistance, and there was no balance due to him as payment for the hours he had worked. See Plaintiffs Exhibit "H" to Affidavit of Peter O'Brian Dellinger, Esq. (Docket # 24). Since Mr. Elwell commenced this action on March 18, 2003, bis FLSA claim is well within the two year statute of limitations period and defendants' motion for dismissal of the claim as time-barred is denied. See, e.g., Udvari v. United States, 2 8 Fed. Cl. 137, 140-41 (Fed.Cl.1993) (plaintiff's cause of action accrued when he began receiving extra compensation, because that was when he "reasonably Should have learned" that he had an FLSA claim); O'Connell v. Champion International Corp., 812 F.2d 393, 394 (8th Cir.1987) (actions accrued when plaintiffs received notice of their termination). . 3. Eleventh Amendment Immunity: Defendants argue that in administering the workfare and interim assistance program they were acting as agents of New York State andtberefo;e are entitled to Eleventh Amendment hmnunity. County agencies are not automatically ilnmune fro1n suit under the Eleventh Amendment. See Mt. Healthy City School Board qf Education v. Doyle, 429 U.S. 274, 280, 97 S.Ct. 568, s'o L.Ed.2d 471 (1977); Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974). lnHo/ley v.Lavine, 605 F.2d 638 (2d Cir.1979), cert. denied, 446 U.S. 913 (1980), ------------- ---------------------------·--------- '·,•I.'· l-len '· . :. 37 Elwell v. Weiss, Not Reported in F .Supp.2d (2006) the Second Circuit rejected the'Monroe County Deparbnent of Social Services' argument that it should be considered an arm of the State under the Eleventh Amendment in connection with its admhlistration of the Aid to Families with Dependent Children (AFDC) (the predecessor to PRWORA). The Court stated that ihe fact that "the State' controls the policies of the County Department of Social. Services is not decisive on the Eleventh Amendment issue." Id at 643. Of "much greater si~ificance" under Holley, "is the entity upon whom rests the primaiy obligation to make payments to the AFDC recipieot," Id at 644. in Holley, twenty-five percent of the benefits at issue were funded by the State, twenty five percent were funded by the County and fifty percent by the federal government. Id Compare Marblev v. Bane, 57 F.3d 224, 233 (2d Cir.1995) (Eleventh Amendment immunity applied to protect county defendants where county expenditures were subject to 100% reimbursement by New York State). *8 Here, local dollars funded fifty percent of plaintiff's benefits and the state was responsible fur the other half .. See N.Y. Soc. Sei:v. L. § l53(1)(d). Moreover, in Marbley the ouly responsibility of the county was "to process paperwork and parcel out funds from the state treasury." Marbley, 57 F.3d at 233. By contrast, here, the county authorities not only partially funded the public assistance program, hot were also responsible for administering the program, Footnotes including aecision making authority for initial eligibility determinations, "employability" detellilinations and WEP assignments. The facts of Elwell's case fall more closely to Holley than Marbley, and accordingly I find that the defendant Schuyler County of Social Services is not an arm · of the State for Eleventh Amendment immunity Purposes. Having detennined that plaintiff is entitled to summary judgment on his first cause of action (the FLSA claim) and therefore entitled to the danoages specifically sought in his summary judgment motion, it is mmecessery for the Court to sub,tantively address his remaining cause of action under the Social Security Act. Conclusion For the reasons stated above, Plaintiff Elwell's motion for summary judgment on his FLSA claim is granted. Plaintiff is entitled to judgment in the amount of $618.00, of which $309.00 are liquidated damagesrequiredby29U.S.C. 216(b). Defendants' cross-motion for sununary judgmeot is denied. SO ORDERED. 1 While plaintiff awaited a decision on bis SSI application, the public assistance benefit he received from participating in WEP is termed "interim assistance." See Defendants' Statement of Facts 1j 7. Under the current system, both the County and the State are entitled to reimbursement of the interim assistance from the WEP participant if his SSI application is ultimately granted and he is awarded retroactive benefits. Id. 2 See Plaintiff's Memorandum of Law in Response to Defendant's Moticnfor Summary Judgment (Docket# 32) at page 13. ("Certainly some of Plaintiff Elwell's 'wotk experience activities' did not create an employer-employee relationship between the plaintiff and the defendant."). 3 As in CityofNew York, defendants here also rely onBnrkhman v. Ghr/iani, 94 N.Y.2d 387, 705N.Y.S.2d 558, 727N.E.2d 1!6 (2000), in which the ~ew York Court of Appeals construed a particulai provision of the New York Constitution and held WEP participants were not employees for ptuposes of a prevailing wage requirement applicable to contractors and subcontractors performing public work. Id at395-97, 705 N.Y.S.2d 558, 727 N.E.2d 116. Among the grounds upon which the Second Circuit distinguishedBrukhman was that the New York court's analysis did not utilize "our longRstanding test for an em.ployerRemployee relationship11 and did not "take into account the views of the agencies charged with enforcing" the relevant federal statute. City of New York, 359 F.3d at 95. End of Document © 2014 Thomson Reuters. No claim to or'1ginal U.S. Government Works. ~-- ~ i - . ' - 38 ~!.:i r. ,4 >:""', l;.;..J ~fl~ ff.;;~ ·~ ~~~"'\ i,I ~ ... ........... j,".PJ:i .. ~\l .~~ >!·• ;~ ~~: ...-:._ ~;·, f,'Vni:.iJ'm W' OASp > Welfa~ to Work . .., Labor Protections and Welfare Reform Accesslbl!ity Infornlil!!P.n J May :i997 (Rev. 2/99) The Personal Responsiblllty and Work Opportunity Reconciliation Act of 1999 Increased .! emphasis on the need to move welfare recipients from welfare to work. The new law gives state and tribal governments broad latitude to meet specified work requirements. However, ! requirements of other laws affecting workers and the workplace also must be met. In an effort to help you better understand the requirements of these other laws, the United states Department of Labor has prepared a guide entitled "Haw Warkalace Laws Aoplv to Welfare Redpients" that Is attached. In addition, the United States Department of Agriculture has developed additional guidance to clarify the use of food stamps as a means to meet the requirements of the minimum wage law that is also attached. If you have questions concerning the application of workplace laws to the Temporary Assistance for Needy Families program, please direct Inquiries to the U.S. Department of Labor or other designated contact. How Workplace Laws Apply to Welfare Recipients The passage of the Personal Responsiblllty and Work Opportunity Reconciliation Act of 1996 (PRWORA) In August 1996 Increased emphasis on the need to move welfare reel.plants from welfare to work. Under the Act, the Aid to Families with Dependent Children (AFDC) program was replaced with the Temporary Assistance for Needy Families (TANF) program. The new welfare law gives state and tribal governments broad latitude to meet specified ill work requirements. However, requirements of other laws affecting workers and the workplace also must be met. Work Activities and Requirements The welfare law requires that a designated percentage of all TANF families have an adult engaged in work activities (famllles with no adults are exempted). States have the option of exempting sing le parents of chlldren under one from the work requirement. The required participation rates increase each year, culminating at 50 percent for all families with an adult and 90 percent for two-parent families In FY 2002. In order to be counted towards the work participation rate, a single parent is required to be 39 . ; : '. '. '' I . . .,J, ~~.~'.: ;t<:. - . f.~ : ~i/:' .l!: [~~ J~. . ·' )~}. ' ':':i.;:. In a_~dition, a limited number of TANF recipients can meet the work requirement by participating In vocational training and high school education programs.m. About This Gulde This guide contains general questions and answers on hc;iw workplace laws enforced by the Department of Labor apply to welfare recipients. It Is an effort to answer fundamental questions about the relationship between welfare law and workplace laws such as the Fair Labor Standards Act (FLSA), the Occupational Safety and Health Act (OSHA), Unemployment Insurance (UI) and anti-discrimination laws. States should consider the appllcablfity of these laws as they design and Implement their work programs. The guide . also addresses the relationship between the tax treatment of welfare benefits and workplace laws. · This guide Is simply a starting point. It cannot provide the answers to the wide variety of Inquiries that could be raised regard Ing specific work programs, The i rilpact of workplace laws on work programs for welfare recipients and the answers to many questions wlll be determined by the specific facts of the particular situation. Many questions wlll have to be answered on a case-by-case basis. Employment Laws 1 •. Do federal employment laws apply to welfare recipients participating In work activities under the new welfare law in the same manner they apply to other workers? Yes. Federal employment laws, such as the Fair Labor Standards Act (FLSA), the Occupational Safety and Health Act (OSHA}, Unemployment Insurance (UI), and anti- discrimination laws, apply to welfare recipients as they apply to other workers. The new welfare law does not exempt welfare recipients from these laws. The Fair Labor Standards Act 2, Does that mean that welfare rec:ipients engaged in work activities under the new welfare law will have to be paid the minimum wage? The minimum wage and other FLSA requirements apply to welfare recipients as they apply to all other workers. If welfare recipients are "employees" under the FLSA's broad definition, they must be compensated at the applicable minimum wage.ffi · Welfare recipients would probably be considered employees in many, if not most, of the work activities described in the new welfare law. !=xceptions are most likely to include Individuals engaged in activities such as vocational education, job search assistance, and secondary school attendance, because these programs are not ordinarily considered employment under the FLSA. 3. Are welfare recipients who participate in job training exempt from the minimum wage laws? An individual in training that meets certain criteria under the FLSA and Is not otherwise an ; ; _ - . htw;t4w.w.w..dol.go:viasp/.w,Z.wlw.elf~ll·~tm~ .. -~-· ~.·· ~. ~~~~~~-~~~l.3.0l2005~~~~ ~~?: •·-·::-- -:-:.:.:.::-··- ••:= " OH•- _ _. • ;.•. -"""~··---:.:·::.:;~_:::a•~:·:;:• •••••--·••••••••• 0 ..... ornm••mn•• H m .. ,,,, .,·,._---,_·;::;• <10 ·~. ., ' ., . coverecj.{>y the minimum wage. reqt.iirements of the FLSA. The relevant criteria for such · training ·are: •'.· •Training is similar to.that given in a vocational school; • rtalning Is for the benefit of the trainees; •Trainees do not displace regular employees; • Employers derive no immediate advantage from trainees' activities; •Trainees are not entitled to a job after trah')ing·1s completed; and . • Employers and trainees understand that trainee is not paid. .) : 4. How does the FLSA affect "workfare" arrangements that require welfare ;1·: recipients to participate In work activities as a condition for receiving cash f.'' assistance from the state? ; .. -;..:;. . ·:~··. •' ... }. ;. . . ' \· ... . :'::·"' ,._. Welfare recipients in "workfare" arrangements, which require recipients to work In return for their welfare benefits, must be compensated at the minimum wage If they are classlfled as "employees" under the FLSA's broad definition. Where the state is the employer of a workfare participant who is an employee for FLSA purposes, the state may consider all or a portion of cash assistance as wages for meeting the minimum wage so long as the payment Is clearly identified and treated as wages, the payment is understood by all parties to be wages, and all applicable FLSA record keeping criteria· are met. Where a private company or local government agency is the employer of the workfare participant, the state welfare agency may use the recipient's welfare benefits to subsidize or reimburse that employer for some or all of the wages due. s. Could states that operated Community Work Experience Programs ( CWEP) for welfare recipients under the predecessor JOBS program continue to operate such programs in the same manner under the new welfare law? The ablllty of states to operate programs like CWEP will depend on the details of their particular programs. The o Id welfare law specifically stated that a CWEP participant was not entitled to a salary or any other work or training expense provided under any other law • Under CWEP, the welfare grant divided by the hours worked was required to meet or exceed the minimum wage. The new welfare law eliminated CWEP and the entire JOBS program. As a result, welfare recipients must be compensated at the minimum wage If they are classified as "employees" under the FLSA's broad definition. However, If welfare recipients are participating In activities where they are not "employees" under the FLSA definition, they will not have to be compensated at the minimum wage. Thus, while states may be able to continue programs similar to those that existed under CWEP, they may need to modify the programs to reflect changes In the law. 6. May food stamps be counted towards meeting minimum wage requirements? Under two programs created by the Food Stamp law, food stamp benefits (coupons or their cash value) may contribute towards meeting minimum wage requirements for TANF ''! recipients in work activities. Under the Food Stamp work supplementation program, employers may receive the value of the food stamp allotment as a wage subsidy for new employees hired as part of the work supplementation program. As with other wage subsidy programs, the value of the Food Stamp benefit is converted to a cash wage subsidy paid by the employer as a wage and is ~·-~~http,;/,~'\M.WYt..dol,gQ.:v:laspb:N.2.wbN.elfare.hm. '--~-~~~~--~~~ll,l3.0i20Q.....,_,~-~ I: ·. . ·-·- .• .·::::. -····: :·:.. .. . .. . .. '·· ·"":.:··:::·.:::. ·: 41 \' .' : ~ i ,·· ; ; ::. .... ··--·---···-- -· ·-· --··--···--... --···- ··-···-· i-·-----·-··- -···-···-·· -·~:·· provisions. 0 . The Food Stamp law speclflcally permits states to establish w'~rkfare programs (to be · approved by the U.S. Department of Agriculture) under which certain welfare recipients are required to perform work In retum for compensation In the form of food stamps. In other· words, participants may be required to "work off'' the value of their food stamps. The state or other employers participating In the workfare program may then credit the value of the food stamps t9wards Its minimum wage obligations. The number of hours that a food stamp recipient may be required to work Is determined by dividing the value of the food stamp allotment by the state or federal minimum wage (whichever Is higher), up to a maximum of 30 hours per week Participation In Food Stamp Workfare programs may be counted towards TANF participation requirements, so that a participant who Is employed by the state may receive food stamps as compensation for certain hours and receive.welfare benefits as compensation for other hours of employment. In all cases, total compensation must equal or exceed the minimum wage for each hour worked. Additional guidance on the use of food stamps towards the minimum wage will be provided by the U.S. Department of Agriculture's Food Stamp Program Office. 7. Aside from food stamps, may noncash benefits provided by the state, such as child care services or transportation, be credited toward meeting FLSA minimum wage requirements? Only under limited circumstances. Such benefits may be credited as wages only when the state is the employer and fill of the following criteria are met: • Acceptance of noncash benefits must be voluntary; • Noncash benefits must be customarily furnished by the employer to its employees, or by other employers to employees In similar occupations; and • Noncash benefits must be primarily for the benefit and convenience of the employee. Because these criteria are quite strict, it is likely that these benefits will not count as wages in most circumstances. Credit may not be taken for pensions, health Insurance (including Medicaid), or other benefit payments otherwise excluded under the FLSA. Occupational Safety and Health Act 8. How does the Occupational Safety and Health Act (OSHA) apply to welfare recipients participating in work activities under the new welfare law? The new welfare law does not exempt employers from meeting OSH Act requirements. Therefore, OSH Act coverage applies to welfare recipients in the same way that it applies to all other workers. However, becaUS\!! the OSHA does not have direct jurisdiction over public sector employees in many states, the question of who is the responsible "employer" is an Important one. This Is particularly true in cases where work activities are administered as part of a public-private partnership. In these situations, OSHA will determine whether the employee Is In the public or private sector on a case-by-case basis. Generally, case law under OSHA tends to place compliance responsibility on the party most directly controlling the physical conditions at a workslte. '12 ' '; ,._.,_, It depends on the state. OSHA does not have direct jurisdiction over public sector employees In many states. Yet, In the 23 states and two territories where there are OSHA- approved state plans, the states are required to extend health and safety coverage to employees of state and local governments. To the extent participants in the9e'states and territories are emplovees of public agencies, they would be protected by the applicable health and safety StCilndards. i:n the other states and territories, there would be no OSHA coverage of participants who are public sector employees. Unemployment Insurance 10. Are welfare recipients participating in work activities covered by the Unemployment Insurance (UI) System ? · Generally, unemployment insurance laws apply to welfare recipients In work activities In the same way that they apply to all other workers. Unempioyment insurance coverage extends only to workers who are considered "employees," according to definitions provided by state UI laws. Consequently, If welfare recipients are In work activities where they would be classified as employees, they will be covered by the UI system. There are some exceptions. While federal law requires states to extend UI coverage to services performed for state governments and non-profit employers, services performed as part of publicly funded "work-relief'' employment or "work training" programs may be excluded by states and, in fact, are excluded by all states except Hawaii. Under the new welfare law, a number of community service-related activities could fall within the "work- reller' exception to UI coverage. An Unemployment Insurance Program Letter (UIPL 30-96) Issued In August 1996 clarified the criteria app.llcable to the "work-rellef" and "work training" exceptions. In order to fall within the exception, activities must primarily benefit community and participant needs (versus normal economic considerations) and· services must not otherwise normally be provided by other employees. If such activities do not fall within the exception, participants providing services for these entities would likely be covered by the UI program. 11. What about welfare recipients who are working for private sector employers? Will they be covered by the UI program? The "work relief" and "work training" exceptions for UI do not apply to the private sector. For private employers the question of UI coverage will hinge on whether a participant is deemed an "employee." The tests for making these determinations are made by the states and are generally similar to the common law test which is based on "the right to direct and control work activities." Anti-Discrimination Laws 12. Would federa I anti-discrimination laws apply to welfare recipients who participate In work activities under the new welfare law? Yes •. Anti-discrimination Issues could arise -- primarily under titles VI and.VII of the Ci\111 . Rights Act, the Americans with Disabilities Act, section 504 of the Rehabilitation Act, the Age Discrimination in Employment Act, and the Equal Pay Act. Furthermore, if participants work for employers who are also federal contractors, discrimination complaints could be filed under Executive Order 11246, Section 503 of the Rehabllltatlon Act of 1973, or the Vietnam Era Readjustment Assistance Act. As with the other laws discussed above, these laws would apply to welfare reel pients as they apply to other workers. Additional guidance on these laws, many of which are not within the jurisdiction of the Department of Labor, will be 43 . ; Tax .Treatment of TANF Benefits 13. Does the Notice issued by the Internal Revenue Service (IRS) on December 17, 1999 (Notice 99·3) addressln!J: ~he federal income and employment tax consequences of TANF payments made to welfare recipients engaged In TANF work activities mean that such Individuals are not employees under the workplace laws? No. The IRS Notice addresses the conditions under which TANF payments received by lndlvlduals engaged In TANF work activities are not Income, earned Income, or wages for federal Income and employment tax pu.rposes. (See IRS. Notice 99-3). . . As the Notice expressly recognizes, the tax treatment of TANF payments received does not determine whether a welfare recipient engaged in a work activity (Including work experience and community service) under TANF is an employee for purposes of the FLSA or the other workplace laws. Rather, the tax determination was based upon considerations unique to federal tax liability. Indeed, the Notice specifically assumes for purposes of Its analysis that the recipients of TANF are common law employees. The Notice also recognizes that TANF payments may have two purposes: to promote the general welfare and to serve as compensation for services. Thus, the notice Is consistent with the Department's view that TANF participants engaging in mostTANF work activities, including work experience and community service, are llkely to be employees under the workplace laws. The courts have recognized that the FLSA has a broader definition of employment than exists under the traditional common law. In order to determine whether someone Is an employee under the FLSA, It Is Important to consider all of the clri:umstances relating to the economic realltles of the workplace relationship. The common law test of employment status, which Is the test of coverage uttllzed by most of the other laws the Department administers, slmllarly requires an assessment of all aspects of the worker's relationship to the potential employer, with no one factor being determinative. Whether or not the payments received by a worker are subject to income and employment taxes has no bearing on the economic realltles of the relationship test under the FLSA and little bearing on the common law analysis. 1. This guide refers only to state governments, although It Is possible that county or local government entitles wlll be responsible for implementing state and tribal welfare programs. Information In the guide concerning the role of a state agency In implementing the welfare program, paying out the benefits, and, where relevant, employing welfare recipients, would apply to a county or local government agency, where that agency, not the state, Implements welfare, pays out the benefits and employs welfare recipients. 2. Indian Tribes may choose to run their own Tribal TANF programs separate from the state. While these programs must Incorporate time limits and work requirements, participation rates are determined on a case-by-case basis according to economic need. 3. The FLSA establishes federal minimum wage, overtime pay (for hours worked over 40 In a workweek), child labor, and recordkeeplng requirements for covered employees. The law affects full-time and part-time workers In the private sector and In federal, state and local governments. For the FLSA to apply, there must be an employment relationship between an employer and an employee. To "employ" under the FLSA means to "suffi!r or permit to work." This is a broader definition of employment than exists under the traditional common law. To determine If there Is an employment relationship for purposes of the FLSA, one must consider all the circumstances, including the economic realities of the workplace - ' . l i ,.. 1· ... ·· This guide Is for general Information and Is not to be considered in the si;1me light as statements of positiori contained in Interpretive Bulletins published In the Federal Register and the Code of Federal Regul!itlons, or in offlclal opinion. letters of the Department of Labor • ......... ....,..,....~~~·~---~-- --~~ ... ·-----------~ ....... -.......... -.... .. ---··--· USDA Guidance The Department of Labor has concluded that. the Fair Labor Standards Act (FLSA) applies to participants In the Temporary Assistance for Needy Famllles (TANF) program In the same way as It applies to other workers. This means that in many cases participants will have to be paid the minimum wage. In calculating the minimum wage, States can combine food stamp benefits and TANF grants. This can be done In either workfare or a wage supplementation program. Under a wage supplementation program, the value of benefits are cashed out and provided to an employer who In turn pays the money to participants as a wage. Furthermore, for those. TANF households normally exempt from food stamp workfare because they Include parents or caretakers of a dependent child under 6 years old (between 1 and 6 In some States), States may use the Simplified Food Stamp Program to ensure that food stamps count toward the minimum wage. The simplified program was des lgned to be the vehicle for creating conformity between TANF and the Food Stamp Program states can Include parents or other caretakers of a dependent child under the age of six food stamp workfare simply by adopting TANF rules relating to workfare exemptions. Simplified programs must be cost neutral. Because removing the workfare exemption for parents or caretakers of dependent children will not increase program costs, we will provide expedited approval to such requests. To make this change, States need only send a letter to the Food and Consumer Service (FCS) Indicating their wish to avail themselves of the simplified program. A cost neutralizer analysis Is not required. For additional Information on the Simplified Food stamp Program, states should contact FCS at (703) 305·2519. FCS' malling address Is Food and Consumer Seivlce - Food Stamp Program, 3101 Park Center Drive, Alexandria, VA 22302. How Workplace Laws Apply to Welfare Recipients If you have questions concerning the application of workplace laws to the Temporary Assistance for Needy Families program, please di.rect inquiries to the U.S. Department of Labor or.other designated contact for your appropriate region - [Northeast], [ Southeast], [Midwest], [Southwest], [We§l], (callfornia. Hawaii, &. Pacific TerriJ;orles], [Occupational Health and Safety Administration w_si-.A).],[ Unemployment Insurance {UI)], or[ Non· discrimina~i!m Laws]. - .. . ·:·.~::·: .. ... . -. . 45 . ; ., ~ f nformation In the guide con~erni~g th~ ~~I~ -~f ~. ~t~t;· ~g~ncy In (mpi~mentlng the welfare program, paying out the benefits, and, where relevant, employing welfare recipients, would apply to a county or local government agency, where that agency, not the state, implements welfare, pays out the benefits and employs welfare recipients. <~ 2• Indian Tribes may choose to run their own Tribal TANF programs separate from the state. Whlle these programs must Incorporate time limits and work requirements, participation rates are determined on a case-by-case basis according to economic need. 3· The FLSA establishes federal minimum wage, overtime pay (for hours worked aver 40 In a workweek), child labor, and recordkeeplng requirements. The law affects full-time and part- time workers in the private sector and In federal, state and local government. ·For the FLSA to apply, there must be an employment relationship between an employer and an employee. To "employ" under the FLSA means to "suffer or permit to work.'' This Is a broader definition of employment than exists under the traditional common law. To determine If there is an employment relationship for purposes of the FLSA, one must consider all the circumstances, Including the·economic realities of the workplace relationship. !11001.. Home Page I [i«J OASP Home Page , I iii I Top of Document @Back to Top www.dol.gov Frequent!v .Mk!i!J!.Ouestions I Freedom of Information Act I Customer Survey · Prlvacv l!t Security Statement I Disclaimers I E-mail to a Friend U,S, Department of Labor Frances Perkins Building 200 Constitution Avenue, NW Washington, DC 20210 '16 1..S66-4·USA-DOL TIY: l-877-889-5627 Contact U11