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A 2010 amendment to the unemployment compensation statute, which makes personal-care assistants (PCA) who provide direct care to an immediate family member ineligible for unemployment benefits, is unconstitutional.

Statute affecting personal-care assistants is unconstitutional

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A 2010 amendment to the unemployment compensation statute, which makes personal-care assistants (PCA) who provide direct care to an immediate family member ineligible for unemployment benefits, is unconstitutional.

That Feb. 25 ruling from the Court of Appeals in Weir v. ACCRA Care, et al. reversed the denial of benefits to James M. Weir of Richfield, because the statute arbitrarily distinguishes between similarly situated individuals in violation of the Equal Protection Clause of the Minnesota Constitution.

A pair of experts within the state’s legal community said the court made the right ruling.

A media spokesperson for the Minnesota Department of Employment and Economic Development declined to comment about the possibility of a petition for review by the Minnesota Supreme Court.

“We’re reviewing the decision,” said DEED’s director of communications, analysis and research, Blake Chaffee. “We’ll absolutely be in compliance going forward.”

Facts

Weir challenged a DEED determination of ineligibility for unemployment benefits because his work for ACCRA Care Inc. in Hopkins was “noncovered employment.”

Weir cared for his mother from March 2010 until her death in December 2011. Minnesota offers PCA services to qualifying individuals as part of its medical-assistance program, and family members who are employed by provider agencies may become PCAs.

In the denial, Weir was informed that the state’s unemployment-insurance statutes had been amended, and that “employment of an individual who provides direct care to an immediate family member funded through the personal care assistance program” was now considered “noncovered employment.”

Weir argued that the statute classifying his work as noncovered employment violates the Equal Protection Clause of the Minnesota Constitution. A ULJ determined he didn’t have the authority to determine the constitutionality of the statute.

Weir, pro se, pursued a certiorari appeal, and the intermediate appellate court sided with him.

The opinion

The Court of Appeals began by noting that just a little over two months ago in Healthstar Home Health, Inc. v. Jesson, it determined that relative and nonrelative PCAs are similarly situated, since both groups are required to comply with the same statutes, rules and regulations. Thus, the statute denying unemployment benefits to PCAs caring for immediate family members treats similarly situated people differently.

The court then applied the three-pronged Minnesota rational-basis test to determine if the statute can withstand an equal-protection challenge, and it found that the amendment failed with every step.

The first prong is that the distinctions that separate those included within the classification from those excluded must not be manifestly arbitrary.

The court explained that lawmakers adopted the amendment because they were advised by legal counsel for DEED that a fraud problem exists that is more likely to occur with immediate-family PCAs. According to DEED, applicants would “front-load” all of the approved hours during any given six-month period, claiming that they worked extraordinarily high hours during the early weeks or months, and then collect unemployment benefits during the remainder. These PCAs could then collect both wages and unemployment benefits.

Judge Jill Flaskamp Halbrooks wrote:

“But DEED offered no evidence or legal authority to the legislature to support this allegation of fraud, nor has it offered any factual support on appeal. The legislation, therefore, without any factual support for the hypothesized manipulation of the system by immediate-family-member PCAs, was based purely on assumptions rather than facts.”

Thus, the distinction between immediate-family-member PCAs and non-immediate-family-member PCAs is arbitrary.

The second prong is that there must be an evident connection between the distinctive needs peculiar to the class and the prescribed remedy.

Halbrooks wrote that the articulated basis peculiar to the class is to eliminate fraudulently obtained unemployment benefits. But the statutory schemes for both the PCA program and the unemployment-insurance program have fraud protections.

For example, under the PCA statute, flexible use of PCA hours requires a written, month-to-month plan of the projected use of PCA services, and the plan must ensure that the total authorized amount of PCA services for each date span must not be used before the end of each date span in the authorization period.

In addition, the unemployment statute requires that applicants are available for suitable employment and are actively seeking suitable employment. An immediate-family-member PCA participating in the scheme described to the legislature would be committing fraud if he certified that he were available for suitable employment while still caring for the recipient.

“There is no evidence that the existing statutory protections against fraud are inadequate. Nor does it seem likely that denying immediate-family-member PCAs all unemployment benefits would entirely eliminate any potential for fraud,” Halbrooks wrote. “DEED admits that ‘there are certainly applicants like Weir who never attempted to manipulate the system. Similarly, it is unlikely that PCAs working for non-family members never manipulate the system.’ Under these circumstances, immediate-family-member PCAs are being arbitrarily denied unemployment benefits.”

Finally, on the third step — analysis of whether the purpose of the amendment is one that the state can legitimately attempt to achieve — the court held that the classification is overbroad because it creates an irrebuttable presumption that any immediate-family-member PCA who applies for unemployment benefits is doing so fraudulently.

Counsel’s comments

St. Paul attorneys Lee Nelson and Amy Lawler represented the Minnesota Department of Employment and Economic Development.

Chaffee said DEED will revise its initial determination, in light of the court’s opinion, without Weir having to appear once again before an unemployment judge.

Minneapolis attorney Howard Bolter, vice chairman of the Minnesota State Bar Association’s Labor and Employment Section, said, “I think the Court of Appeals absolutely made the right decision.

“I think most employment attorneys would agree with the court that drawing a line between similarly situated people without solid factual evidence is arbitrary. Eliminating arbitrary distinctions prevents the slippery slope to discrimination.”

William Mitchell College of Law professor Peter Knapp also applauded the ruling. “If you work in the unemployment comp area, it felt a little bit like the other shoe dropping. Back in December, the Court of Appeals issued Healthstar Home, which dealt with much the same issue. When that decision came down, we looked at the unemployment statute and said it’s only a matter of time before the court reaches the same conclusion with this distinction between workers.”

Knapp added, “I think the court got it exactly right.”

Regarding Weir representing himself, Bolter noted, “It is also nice to see that individuals who wish to appeal these cases, but cannot afford to or do not want to retain attorneys, can still achieve important, significant results.  The unemployment appeals process in Minnesota enables this to happen through a fairly straightforward, though not entirely simple, process.”

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