Bayada Nurses, Inc. v. Commonwealth, Department of Labor & Industry, 607 Pa. 527

Bayada Nurses, Inc. operates home health care in Pennsylvania, employing licensed nurses and aides who are billed hourly; Bayada pays wages but does not pay overtime to aides.
The Pennsylvania Minimum Wage Act exempts domestic services in or about the private home of the employer, 43 P.S. § 333.105(a)(2), and the Department defines domestic services in regulation 34 Pa. Code § 231.1(b).
Bayada challenged the Department's regulation as applied to agency employers, arguing the exemption should extend to third-party agencies and that joint employment with household clients should qualify for the exemption.
The Department audited Bayada’s payroll records beginning in 2005, announced potential discrepancies in 2005, but no audit was completed and no enforcement action had been taken by 2007.
Bayada filed a petition for declaratory judgment in Commonwealth Court in 2007 seeking invalidation of the regulation and relief recognizing the exemption for agency employers; the Commonwealth Court sustained the Department's demurrer and dismissed.
The Pennsylvania Supreme Court held the matter ripe under Arsenal Coal, affirmed the Department's regulation as reasonable and consistent with the Act, held that only a householder may qualify for the domestic services exemption, and held Bayada, as a third-party agency employer, does not qualify for the exemption.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Ripeness and pre-enforcement review	Bayada claims pre-enforcement challenge is proper under Arsenal Coal.	Department argues petition is not ripe until enforcement action occurs.	Matter found ripe; pre-enforcement review proper under Arsenal Coal.
Scope of the domestic services exemption	Exemption should apply to agency employers and joint-employer arrangements under the Act and FLSA as in pari materia.	Exemption is limited to a householder employer; third-party agencies cannot qualify.	Exemption limited to householder; Bayada cannot qualify as third-party agency employer.
Regulation reasonableness and consistency with the Act	Regulation improperly excludes agency employers from exemption; misreads the Act.	Regulation reasonable, aligned with the Act’s plain language and Department authority.	Regulation upheld as reasonable and consistent with the Act.
Joint-employer status and applicability of exemption	Economic realities/borrowed servant could create a joint-employer scenario that meets exemption.	Even if a joint-employer relationship exists, Bayada does not satisfy the householder-based exemption.	Joint-employer concept does not overcome the householder-based exemption; exemption not extended to Bayada.

Arsenal Coal Co. v. Dep't of Envtl. Res., 505 Pa. 198 (1984) (pre-enforcement challenge allowed when regulation has direct, immediate impact)
Ins. Fed'n of Pa., Inc. v. Cmwlth., Ins. Dep't, 586 Pa. 268 (2006) (remand for merits when regulatory interpretation changes)
PPL Generation, LLC v. Cmwlth. Dep't of Envtl. Prot., 604 Pa. 326 (2009) (pre-enforcement review framework and Arsenal Coal lineage)
Tire Jockey Serv. Inc. v. Dep't of Envtl. Prot., 591 Pa. 73 (2007) (regulatory deference within agency power and reasonableness)
Pac. Merch. Shipping Ass'n. v. Aubry, 918 F.2d 1409 (9th Cir. 1990) (federal floor versus state more generous protections)