Court Rules Home Healthcare Workers Are Employees Entitled to Overtime — Not Independent Contractors

On February 13, 2026, Judge Savage of the U.S. District Court for the Eastern District of Pennsylvania issued a significant opinion in Chavez-DeRemer v. Amazing Care Home Healthcare Services, LLC, No. 24-190, granting in part and denying in part the Department of Labor's motion for summary judgment. The ruling addresses issues that come up again and again in wage and hour litigation: when does calling someone an "independent contractor" actually make them one, and what happens to the people in charge when the label turns out to be wrong?

The short answer, as Amazing Care learned, is that labels don't override reality — and the people who make the decisions can be held personally responsible.

What Happened

Amazing Care is a Pennsylvania company that provides in-home medical care, primarily to children. It employed two categories of workers: home health aides (HHAs), who assisted patients with daily living activities, and licensed practical nurses (LPNs), who provided skilled medical services like administering medication and supervising patients.

In May 2019, following a recommendation from the American Commission of Health Care (ACHC) after an accreditation audit, Amazing Care reclassified its LPNs from W-2 employees to 1099 independent contractors. The company's owner, Christopher Kear, and its Director of Nursing, Josephine Kilipko, made that decision together. Critically, nothing about the LPNs' actual jobs changed when the classification did. They continued doing the same work, following the same care plans, filling out the same time sheets, and undergoing the same performance reviews.

The consequence of reclassification was straightforward: workers labeled as independent contractors were not paid overtime for hours worked beyond 40 per week. Kear himself testified that the reclassification was done, at least in part, to avoid the cost of paying overtime.

When the DOL's Wage and Hour Division investigated beginning in July 2021, it found that 284 workers had been denied overtime wages between July 2020 and December 2024, totaling an estimated $5,919,096.34 in unpaid overtime.

The Court's Key Findings

Both Kear and Kilipko Are Personally Liable as "Employers"

The FLSA defines "employer" broadly to include any person acting in the interest of an employer in relation to an employee. The court applied the Third Circuit's four-factor Enterprise test and found that Kilipko qualified as a joint employer — even though she did not set workers' pay rates.

The court's reasoning is instructive for anyone who thinks that lacking control over wages is a shield against personal liability. Kilipko was involved in hiring and firing, she created the care plans that controlled how workers did their jobs, she supervised their daily work and conducted performance reviews, and she reviewed time sheets and employment records. Perhaps most significantly, she helped Kear decide to reclassify LPNs as independent contractors — the very decision that determined whether those workers would receive overtime pay.

The takeaway: if you exercise meaningful control over workers, you can be held individually liable for FLSA violations regardless of whether you personally sign the paychecks.

LPNs Are Employees, Not Independent Contractors

This is the heart of the opinion, and the court's analysis under the six-factor Sureway Cleaners test is thorough. Five of the six factors weighed in favor of employee status.

Control. Amazing Care controlled the clinical and administrative aspects of LPNs' work. Kilipko created detailed care plans dictating how LPNs treated patients, reviewed their notes weekly, and corrected any deviations. The company set wages unilaterally. That LPNs could technically turn down assignments or take time off didn't change the analysis — the question is the right to control, and Amazing Care plainly had it.

Profit or Loss. LPNs had no meaningful opportunity for profit or loss based on managerial skill. Kear set their hourly rates. Their hours were dictated by patient care needs. About 90 percent worked exclusively for Amazing Care, often on long-term assignments of up to 18 hours a day. The ability to decline a shift is not the same as running your own business.

Investment. This was the only factor that weighed slightly against employee status, because LPNs had to provide their own PPE. But the court noted that they did not need to purchase the medical tools or materials needed to treat patients — just their own protective gear.

Skill. While LPNs are undeniably skilled professionals, the court found that they did not use their skills in an "independent way." Kilipko's care plans dictated their treatment approach, and her weekly reviews ensured compliance. Possessing a specialized skill does not make you an independent contractor if someone else controls how you use it.

Permanence. The overwhelming majority of LPNs worked exclusively for Amazing Care over extended periods, sometimes caring for the same patient for years. This was not the kind of transitory engagement characteristic of independent contracting.

Integral Part of the Business. Amazing Care is a home healthcare company. LPNs provided the home healthcare. This factor weighed strongly in favor of employee status.

The court drew particular guidance from the Second Circuit's decision in Brock v. Superior Care, Inc., a strikingly similar case involving nurses at a home healthcare company. In Brock, as here, the employer maintained two payrolls — one for "employees" who didn't work overtime, and another for "independent contractors" who did. The classification had nothing to do with the nature of the work and everything to do with avoiding overtime obligations.

The court also highlighted telling details: even after reclassifying LPNs as independent contractors, Amazing Care continued referring to them as "employees" in its own internal documents. A 2020 job offer form for an LPN described the position as "employment at will" and welcomed the worker with an "offer of employment."

Recordkeeping Violations

The court granted summary judgment on the DOL's recordkeeping claim. Amazing Care's payroll records did not include overtime hours, overtime rates, overtime pay amounts, or daily and weekly straight-time earnings — all of which are required under Section 11(c) of the FLSA and 29 C.F.R. § 516.2. The defendants' argument that the information they did record was accurate missed the point entirely. The violation was in what was missing from the records, not what was there.

Liquidated Damages Are Warranted

Under the FLSA, liquidated damages equal to the amount of unpaid wages are presumed when an employer violates overtime provisions. A defendant can avoid them only by showing both good faith and a reasonable belief that its conduct was lawful. The court found that the defendants failed on both counts.

Kear admitted that the reclassification was done in part to avoid paying overtime. Neither he nor Kilipko ever consulted an attorney or any other source to determine their legal obligations. Their employee handbook — which both testified they were familiar with — specifically stated that non-exempt employees working over 40 hours per week are owed overtime under federal law. Ignorance of the law is not a defense, and claiming you didn't know your conduct was illegal when your own handbook says otherwise is a difficult position to maintain.

What Goes to the Jury

Several important issues remain for trial. While the court resolved the legal questions — who is an employer, who is an employee — factual disputes preclude summary judgment on the amount of overtime actually owed, whether injunctive relief is warranted, and whether the violations were willful (which would extend the statute of limitations from two years to three).

On willfulness, the court found a genuine factual dispute. Kear and Kilipko knew employees are entitled to overtime. Their employee handbook said so. Kear conceded the reclassification was done to avoid overtime costs. But the defendants relied on ACHC's recommendation in making the classification decision, and a reasonable jury could find that reliance created a genuine question about whether they knew their conduct was illegal — even if it doesn't amount to good faith.

Why This Case Matters

This opinion is worth paying attention to for several reasons.

First, it is a thorough and well-reasoned application of the Sureway Cleaners test in the home healthcare context. The home health industry has long been a hotspot for worker misclassification, and this decision makes clear that the economic realities test looks at what actually happens on the job, not what the paperwork says.

Second, the court's analysis of individual liability is a reminder that corporate officers and managers cannot hide behind the company when FLSA violations occur. Kilipko did not set wages, but her involvement in hiring, supervision, and the classification decision was enough to make her a joint employer.

Third, the court's treatment of the "independent contractor" factors that defendants typically rely on — ability to decline work, flexibility in scheduling, ability to work for others, ability to hire substitutes — demonstrates how little weight those factors carry when the overall economic reality points toward an employment relationship. About 90 percent of LPNs worked exclusively for Amazing Care. They rarely exercised their theoretical ability to hire substitutes. Their "flexibility" in scheduling was illusory given that they worked up to 18-hour shifts on long-term assignments.

Finally, the case is a cautionary tale about acting on advice without understanding the legal consequences. ACHC recommended that Amazing Care split its workforce into W-2 and 1099 categories, but ACHC is an accreditation body — not a law firm. It never reviewed Amazing Care's pay practices, never advised on overtime obligations, and never analyzed whether the workers it suggested be classified as independent contractors actually met the legal standard. Acting on that advice without seeking legal counsel left the defendants without a viable good-faith defense.

The Bottom Line

If you are a worker in the home healthcare industry — or any industry — and your employer has classified you as an independent contractor, the label on your pay stub does not determine your legal rights. What matters is the economic reality of your working relationship. If your employer controls when, where, and how you work, sets your pay, and your services are integral to their business, you may well be an employee entitled to overtime pay regardless of what they call you.

If you believe you have been misclassified and denied overtime or other wages you are owed, you should consult with an experienced employment attorney to evaluate your situation.

This blog post is for informational purposes only and does not constitute legal advice. If you have questions about your employment classification or wage rights, please contact our office for a consultation.