Last week, a New York federal district court found the New York City Health and Hospitals Corp. is a “political subdivision” of the state and therefore exempt from state labor laws, according to a legal analysis from Mintz, Levin, Cohn, Ferris, Glovsky and Popeo via The National Law Review.
HHC was established by the city in 1969 and includes more than a dozen hospitals throughout the city’s five boroughs.
Plaintiffs filed suit to recover unpaid wages allegedly owed to hourly employees for work performed during and after their scheduled shifts, during their lunch breaks and other meal periods, and during breaks. The plaintiffs claimed this work constituted overtime and gap-time pay.
New York’s labor law excludes individuals who are employed “by a federal, state or municipal government or political subdivision thereof” from the definition of “employee,” according to the analysis.
The court looked at a few things to determine whether HHC was a political subdivision.
• whether the legislation enabling HHC provides it with “state characteristics”
• whether HHC performs an “essential government function”
• whether HHC is heavily supported by public funding
By examining each inquiry, the court found HHC to be akin to a political division. The legislation that crafted the corporation expressly provided that it was created to serve and support and essential public function. Second, its government and public function involves providing care to New York’s “ill and infirm population.” Finally, the corporation receives substantial public funding.
Lawyers from Mintz, Levin, Cohn, Ferris, Glovsky and Popeo said the court’s ruling will not apply to the majority of New York’s hospitals that are simply nonprofit, and not every public benefit corporation is treated as a “subdivision of the state.” However, the attorneys said there are many municipal hospitals that may qualify for the court’s stated exemption.
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