Background
Between 2018 and 2022, Gui Zhu Chen and other home health aides filed individual wage complaints with the New York State Department of Labor (DOL), alleging their employers had violated the Minimum Wage Act (Labor Law art. 19) by improperly relying on the “13-hour rule.” Under that rule — examined by the Court of Appeals in Andryeyeva v New York Health Care, Inc., 33 NY3d 152 (2019) — an employer may pay a home health aide for only 13 of a 24-hour shift, but only if the aide actually receives at least eight hours of sleep (five uninterrupted) and three one-hour meal breaks. Petitioners alleged their sleep and meal breaks were routinely interrupted, making the employers’ pay practices unlawful.
DOL opened investigations but then closed them across the board, citing a policy it had adopted internally: any wage complaint by a home health aide covered by a union contract with a mandatory arbitration clause would be closed, on the theory that the employee had an “other available means of relief.” DOL never published this policy or went through the rulemaking process required by the State Administrative Procedure Act (SAPA), and never made an individualized assessment of any petitioner’s claim.
Petitioners filed a combined CPLR article 78 proceeding and declaratory judgment action. Supreme Court, Albany County annulled DOL’s closure of the investigations, finding the policy was a “rule” promulgated in violation of SAPA, and subsequently certified a class of all home health aides who (1) filed wage claims with DOL for 13-hour-rule violations, (2) had union contracts with mandatory arbitration provisions, (3) had not filed claims via arbitration, and (4) had their cases closed under DOL’s arbitration-closure policy.
The Court’s Holding
The Third Department affirmed both the annulment of the closures and the class certification order. The central question was whether DOL’s arbitration-closure policy constituted a “rule” under SAPA § 102(2)(a)(i) — defined as an agency statement of “general applicability that implements or applies law” — requiring formal rulemaking before it could take effect. The Court held that it did.
DOL argued the policy was merely an exercise of its investigatory discretion (authorized by Labor Law § 196(2)), not a rule. The Court rejected that framing. Although Labor Law § 196 vests DOL with discretion over enforcement actions, if an agency self-imposes limits on that discretion through a fixed, generally applicable principle applied “without regard to other facts and circumstances,” the limitation becomes a rule requiring SAPA compliance. Here, DOL closed every complaint subject to arbitration — except retaliation claims — without any individualized review, and explicitly stated that future claims would be predisposed to closure on the same basis. That across-the-board, predetermined approach was a rule, not a discretionary enforcement judgment.
The Court separately affirmed the class certification order — noting that DOL had never briefed the class-certification merits on appeal, arguing only that reversal of the underlying judgment would moot the class order. Because the judgment stands, so does the class.
Key Takeaways
- An agency may not use a blanket, uniformly applied closure policy as a substitute for case-by-case discretion without going through SAPA rulemaking — a “fixed, general principle” applied across the board is a rule requiring formal promulgation.
- DOL’s authority under Labor Law § 196 to exercise “discretion” in enforcement does not shield a policy from SAPA if the policy predetermines outcomes for a class of complaints without individualized assessment.
- Home health aides covered by mandatory arbitration clauses retain the right to have DOL investigate their wage complaints — the availability of arbitration does not authorize DOL to close an investigation without looking at the merits of the individual claim.
- Class certification of potentially thousands of home care aides was affirmed, opening the door to DOL reopening closed investigations across the certified class.
Why It Matters
This decision is a significant victory for one of New York’s most vulnerable workforces. Home health aides — predominantly immigrant women of color — work long 24-hour shifts in isolated home settings with limited recourse when employers violate the 13-hour rule. DOL’s arbitration-closure policy effectively left thousands of these workers without a governmental enforcement avenue, directing them into union-negotiated arbitration that, in practice, many never pursued.
For labor and employment practitioners, the ruling clarifies that the SAPA rulemaking requirement functions as a check on agency self-restriction: an agency cannot quietly adopt a policy that predetermines outcomes for a class of claimants without going through the notice-and-comment process. For employers of home health aides and the home care industry broadly, the decision signals renewed DOL enforcement attention to 13-hour-rule compliance now that the arbitration-closure safe harbor has been annulled. The certified class of affected aides — whose closed investigations must now be reopened — represents substantial potential back-pay liability.