Court Opinion

ID: 3155983
Source: CourtListenerOpinion
Date Created: 2015-11-19 14:07:02.401283+00
Date Added: 2024-06-11T11:57:32.579487
License: Public Domain

This opinion is uncorrected and subject to revision before
publication in the New York Reports.
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No. 139
In the Matter of Walter E.
Carver,
            Respondent,
        v.
State of New York, et al.,
            Appellants.

          Valerie Figueredo, for appellants.
          Susan C. Antos, for respondent.
          National Center for Law and Economic Justice, amicus
curiae.

LIPPMAN, Chief Judge:
          We hold that petitioner, who performed work for the
City of New York in exchange for cash public assistance and food
stamps, is protected by the federal minimum wage provisions of

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                                - 2 -                        No. 139

the Fair Labor Standards Act (FLSA).
            Petitioner Carver is a 69-year-old Vietnam War veteran
who received public assistance from the City of New York, through
the State-funded Safety Net Assistance Program (see Social
Services Law §§ 61, 62, 157 et seq.), beginning in 1993 and
continuing until March 2000.    During that time, the City
required, in accordance with the Social Services Law (see Social
Services Law §§ 335-b, 335-c), that he work 35 hours per week in
the "Work Experience Program" (WEP) of the City's Human Resources
Administration (HRA) in order to receive public assistance
benefits.    HRA administers the State's public assistance programs
for New York City, with oversight from the New York State Office
of Temporary Disability Assistance (OTDA) (see generally Social
Services Law § 61).
            Carver was assigned to the mailroom of Coney Island
Hospital where he sorted and delivered the mail.     In 1995, he was
reassigned to the Manhattan Terminal of the Staten Island Ferry,
where he would sweep the floors, spread salt in the winter and
pick up trash.    In return for performing these services, Carver
received $176 every two weeks, along with food stamps.     His cash
compensation plus the food stamps equaled the minimum wage for
the amount of hours that he worked.     If he missed work, his
assistance was reduced.    Carver never received any training in
how to perform these jobs, or participated in any vocational
training classes during those years.     He participated in only one

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week of classes, which concerned how to write a resume and look
for a job at the end of the program.
           In 2000, Carver was told that he would have to leave
WEP, and on March 4, 2000, his benefits were terminated.    On
August 10, 2007, Carver won $10,000 in the New York State
Lottery.   The New York State Division of Lottery and the New York
State Office of Temporary Disability Assistance (OTDA) invoked
New York Social Services Law § 131-r, which authorizes the State
to appropriate half of any lottery prize over $600 to "reimburse
[itself] . . . for all . . . public assistance benefits paid to
[the prizewinner] during the previous ten years."
           In a letter dated September 27, 2007, Carver requested
a review of OTDA's determination.   On January 8, 2008, OTDA
notified Carver that it would not refund any of the $5,000.
Carver then filed the underlying CPLR article 78 proceeding in
April 2008 against OTDA, among others, alleging that the
interception of his lottery winnings violated his rights under
the FLSA and the New York State Minimum Wage Act (Labor Law §
652).   Specifically, Carver contended that the OTDA required him
to work 35 hours per week in order to receive public assistance
benefits, and that his biweekly cash benefits, plus the value of
the food stamps he received, equaled no more than the federal or
New York State minimum wage.   Thus, were OTDA permitted to recoup
a portion of the benefits paid to him through Social Services Law
§ 131-r, then Carver would be paid less than minimum wage, in

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violation of the FLSA.   The defendants cross-moved, inter alia,
to dismiss the petition pursuant to CPLR 3211 (a)(7).
          Supreme Court granted the cross motion and dismissed
the proceeding.   As relevant here, the court noted that the issue
of whether WEP workers are deprived of minimum wage standards by
the implementation of Social Services Law § 131-r is an issue of
first impression.   The court stated that Carver implicitly agreed
to "the statutory requirement of recoupment of previous public
assistance monies [he] had received" because by purchasing the
lottery ticket he "was subject to all of the rules, regulations
and statutes with respect to that lottery ticket."   The court
then stated that Carver's public assistance benefits were
determined by "his household size, rent and other eligibility
factors" under the Social Services Law, and not by the number of
hours he worked per week in WEP.   Furthermore, the court
determined that although the Social Services Law required Carver
to engage in work activities "in return for [his public
assistance] benefits," he was not an employee who earned wages
because no "employer-employee relationship" existed "as no income
tax W-2 statement was furnished to [him] or deductions made for
FICA or Medicare taxes."   Finally, the court determined that
Carver was "not a federally protected worker" as he was not an
employee, and thus the federal minimum wage law does not apply to
him.
          The Appellate Division unanimously modified by

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reinstating the FLSA cause of action against OTDA and its
Commissioner and, as so modified, affirmed. The court stated that
the State's interception of Carver's lottery prize winnings did
not violate the State minimum wage law, which specifically
exempts employees of "federal, state or municipal government or
political subdivision thereof," but that it did violate the FLSA
(Matter of Carver v State of New York, 87 AD3d 25 [2d Dept
2011]).   Applying the "economic reality test," the Court
concluded that individuals like Carver, who receive public
assistance benefits and participate in WEP, are employees under
the FLSA.
            On remand, Supreme Court granted Carver's petition
against OTDA and its Commissioner, and directed defendants to
return his $5,000.    The parties then entered into a Stipulation
and Order of Contingent Settlement which resolved all outstanding
issues, including attorney's fees.
            This Court then granted OTDA leave to appeal from the
Stipulation and Order of Contingent Settlement, bringing up for
review the prior, nonfinal Appellate Division order.    The sole
issue on appeal is whether as a result of his participation in
WEP as a condition of his receipt of public assistance benefits
under Social Services Law § 336 (1)(d), Carver was entitled to
minimum wages under the FLSA.
            The FLSA was passed by Congress in 1938, "to lessen, so
far as seemed then practicable, the distribution in commerce of

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goods produced under subnormal labor conditions" and to eliminate
low wages and long hours in an effort to "free commerce from the
interferences arising from production of goods under conditions
that were detrimental to the health and well-being of workers"
(Rutherford Food Corp. v McComb, 331 U.S. 722, 727 [1947]).    The
FLSA was also enacted to prevent unfair competition through the
use of underpaid labor (see 29 USC § 202 [a] [3]).   The FLSA
provides: "Every employer shall pay to each of his employees who
in any workweek is engaged in commerce or in the production of
goods for commerce, or is employed in an enterprise engaged in
commerce or in the production of goods for commerce, wages at
the" rates set forth in the statute (29 USC § 206 [a]).   An
"employee" is defined as "any individual employed by an employer"
(29 USC § 203 [e][1]).   To "employ" is "to suffer or permit to
work" (29 USC § 203 [5] [g]).   An employer includes "any person
acting directly or indirectly in the interest of an employer in
relation to an employee and includes a public agency" (29 USC §
203 [d]).   Although the FLSA does explicitly exempt certain
employees from its purview, neither workfare nor public
assistance recipients are included among those exemptions (see 29
USC § 213; Powell v United States Cartridge Co., 339 U.S. 497, 517
[1950] [stating that FLSA's exemptions are "narrow and specific,"
and indicating that "[s]uch specificity in stating exemptions
strengthens the implication that employees not thus exempted . .
. remain within the Act"]).

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            To determine whether an individual qualifies as an
employee under FLSA, we must look to the "economic reality," not
the "technical concepts, of the relationship" (Goldberg v
Whitaker House Cooperative, Inc., 366 U.S. 28, 33 [1961]; Tony and
Susan Alamo Foundation v Secretary of Labor, 471 U.S. 290, 301
[1985]; see also Bartels v Birmingham, 332 U.S. 126, 130 [1947]).
More specifically,
            "[b]ecause [the FLSA] defines employer in
            such broad terms, it offers little guidance
            on whether a given individual is or is not an
            employer. In answering that question, the
            overarching concern is whether the alleged
            employer possessed the power to control the
            workers in question, with an eye to the
            'economic reality' presented by the facts of
            each case. Under the 'economic reality'
            test, the relevant factors include whether
            the alleged employer (1) had the power to
            hire and fire the employees, (2) supervised
            and controlled employee work schedules or
            conditions of employment, (3) determined the
            rate and method of payment, and (4)
            maintained employment records"
(Herman v RSR Security Servs. Ltd., 172 F3d 132, 139 [2d Cir
1999], quoting Bonnette v California Health and Welfare Agency,
704 F2d 1465, 1470 [9th Cir 1983]; see Goldberg, 366 U.S. at 33;
Johns v Stewart, 57 F3d 1544, 1557 [10th Cir 1995] [stating that
the economic reality test is the proper test to determine "the
scope of employee coverage under" the FLSA]).
            In Johns v Stewart (57 F3d 1544), the Tenth Circuit,
applying the economic reality test, determined that workers in
Utah's workforce program were not employees within the meaning of
the FLSA.    However, two years later, the United States Department

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of Labor (DOL), the federal agency charged with enforcing the
FLSA, issued a guidance letter entitled "How Workplace Laws Apply
to Welfare Recipients," in which it undertook to explain, in
question-answer format, which federal worker-protection laws
applied to public assistance workers.   The letter states:
          "Do federal employment laws apply to welfare
          recipients participating in work activities
          under the new welfare law in the same manner
          they apply to other workers?
          "Yes. Federal employment laws, such as the
          Fair Labor Standards Act [FLSA], the
          Occupational Safety and Health Act [OSHA],
          Unemployment Insurance [UI], and anti-
          discrimination laws apply to welfare
          recipients as they would apply to other
          workers. The new welfare law does not exempt
          welfare recipients from these laws."
(DOL Guidance Letter, at 40).   According to the DOL, "welfare
recipients would probably be considered employees in many, if not
most, of the work activities described in the [federal public
assistance law]" (id.).   The FLSA charges the DOL with the duty
of administering and interpreting the FLSA.    Accordingly, the
DOL's interpretation of the FLSA is "entitled to considerable
weight in construing the Act" (Tony & Susan Alamo Foundation v
Secretary of Labor, 471 U.S. 290, 297 [1985]).    A 1997 Conference
report (HR Rep No 105-217 [1997], at 934) leaves no doubt the
Congress was aware of and considered the DOL's guidelines and
accepted them, despite efforts to overturn DOL's interpretation

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of the FLSA.1
            To that end, we must apply the economic reality test
and, under that test, the City should be considered Carver's
employer.    The City had the power to hire and fire WEP workers,
in that it was the City's responsibility to assign public
assistance recipients to a WEP agency and the City could dismiss
workers from WEP based upon their performance.    Additionally, the
City and its WEP agencies supervise and control the work schedule
of the workers.    Furthermore, the City and its agencies, such as
HRA, maintain the employment records of the WEP workers.    While
the Social Services Law, not the WEP agencies or the City,
determines the rate and method of payment of WEP workers, that is
simply one factor.    The economic reality test "encompasses the
totality of the circumstances" (Herman, 172 F3d at 139).
            For example, in Alamo (471 U.S. 209), the United States
Supreme Court applied the economic reality test to determine if
certain individuals were "employees" under the FLSA.    The Alamo
Foundation was a not-for-profit organization founded to
"'establish, conduct and maintain an Evangelistic Church . . .

     1
       The United States Department of Health and Human Services
has also concluded that the FLSA applies to public assistance
recipients under the Personal Responsibility and Work Opportunity
Reconciliation Act (PRWORA), also known as the "Welfare Reform
Act" (see 45 CFR 260.35 ["Federal employment laws (such as the
Fair Labor Standards Act [FLSA], the Occupational Safety and
Health Act (OSHA) and unemployment insurance [UI]) and
nondiscrimination laws . . . apply to [Temporary Assistance to
Needy Families] beneficiaries in the same manner as they apply to
other workers"]).

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and generally to do those things needful for the promotion of
Christian faith, virtue and charity.'"    It supported itself by
operating gas stations, stores and other businesses staffed by
"associates."   Associates "receive[d] no cash salaries, but the
Foundation provide[d] them with food, clothing, shelter, and
other benefits" (471 US at 292).
          Noting that it "has consistently construed the [FLSA]
'liberally to apply to the furthest reaches consistent with
congressional direction'" (id. at 296, quoting Mitchell v Lublin,
McGaughy & Associates, 358 U.S. 207, 211 [1959]), the Supreme Court
found that the associates were employees" (Alamo, 471 U.S. at 301,
citing Goldberg, 366 U.S. at 33).    The Court focused on three
factors: (1) the associates received compensation, albeit
"primarily in the form of benefits rather than cash," a
distinction deemed "immaterial;" (2) they were "entirely
dependent upon the Foundation for long periods, in some cases . .
. years;" and (3) any other result would have undermined the
purposes of the FLSA by giving the Foundation a competitive
advantage and "exert[ing] . . . downward pressure on wages in
competing businesses" (Alamo, 471 U.S. at 301, 302).
          The economic reality test, as applied in Alamo, compels
the conclusion that Carver was an "employee" of the City.    The
Staten Island Ferry is an enterprise similar to a privately owned
ferry service or the gas stations and stores operated by the
Foundation in Alamo.   Carver's work was no different from the

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janitorial services performed by salaried City employees at many
offices and other locations.    Like the associates in Alamo,
Carver's benefits were "compensation," given in exchange for his
work -- even if some of those benefits were not paid in cash --
and he was "entirely dependent" on those benefits for years.
          Alamo also establishes that the employer's purposes and
objectives are not relevant in determining a worker's status as
an employee.    The State argues that WEP workers are not employees
because its declared goal is to prepare WEP workers for gainful
employment.    However, this appears to be no different from the
Foundation's goals of Christian ministry.    Had Carver spent most
of his hours receiving training, or education in how to obtain
employment outside of the WEP program, we might have reached a
different conclusion.    As the DOL stated, "individuals engaged in
activities such as vocational education, job search assistance,
and secondary school attendance," are likely exempt from the FLSA
"because these programs are not ordinarily considered employment
under the FLSA" (DOL Guidance Letter, at 40).    However, based on
the record before us, Carver spent his full-time hours doing work
for the City.   The dissent's likening of Carver's 7-year, 35-
hour-work-week engagement through WEP to perform services typical
of any other non-WEP employee, to that of a "student or trainee"
patently ignores the economic reality of Carver's situation (see
dissenting op. at 14).    Moreover, contrary to the dissent's
contention, the policies supporting the passage of the FLSA do

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weigh in favor of finding coverage here.   Were the City permitted
to hire and engage WEP workers for less than minimum wage, they
could effectively suppress the market and impede the FLSA's goal
of eliminating unfair competition though the use of underpaid
labor.
          Furthermore, in United States v City of New York (359
F3d 83 [2d Cir 2004]), the Second Circuit determined that public
assistance recipients obliged to participate in WEP are employees
within the meaning of Title VII of the Civil Rights Act of 1964,
and were thus entitled to Title VII's protection against sexual
and racial harassment (id. at 86-87).   The Court determined that
(1) the receipt of cash payments and food stamps, which equaled
the minimum wage times the number of hours the WEP workers
worked; and (2) the fact that a plaintiff who "refused to work
would lose the portion of the family's grant attributable to her
. . . results in the conclusion that [the plaintiffs] were
employees" (id. at 92).   Although the FLSA was not the focus of
the case in City of New York, the Second Circuit distinguished
Johns and stated that even with respect to the FLSA, "the [DOL],
the agency charged with interpreting . . . the FLSA, has rejected
the Johns approach" (id. at 94).
          Following City of New York, two New York federal
District Courts have applied the same reasoning to cases
involving minimum wage violation claims by public assistance
recipients participating in WEP, holding that they were employees

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(see Elwell v Weiss, 2007 WL 2994308, 2006 US Dist LEXIS 96934
[WD NY, Sep 29, 2006, No. 03-CV-6121]; Stone v McGowan, 308 F
Supp 2d 79 [ND NY 2004]).   Accordingly, as the law stands today,
Carver is correct in asserting that he was an "employee" of the
City under the FLSA when he participated in the WEP program.
          It is true that, in Brukhman v Giuliani (94 NY2d 387
[2000]), this Court, holding that the plaintiffs did not qualify
for a prevailing wage, stated that WEP "workers simply are not in
the employ of anyone" (id. at 395-396).   This Court, however,
expressly limited the opinion, stating "we decide no more than is
before us" (id. at 397 [limiting its holding to apply to the
requirements of the New York Constitution's wage provision]).
Here, the Appellate Division rejected the State's reliance on
Brukhman because this Court did not apply the economic reality
test, which, under federal law, is the applicable test for
determining who is an employer under the FLSA.    Additionally,
Brukhman is distinguishable from this case because the plaintiffs
there argued that they should have been paid at the prevailing
State wage for their participation in WEP, whereas Carver's claim
is under the FLSA's minimum wage standards.     Quite simply, we are
now confronted with an issue of federal law.2    The Supreme Court

     2
       It is mystifying why, on a question of federal law, the
dissent feels compelled to follow a Tenth Circuit decision
predating the adoption of PRWORA and to amplify the import of
Brukhman, while castigating the more recent teaching of the
Second Circuit and the guidelines of the Labor Department (see
dissenting op. at 2-3, 20-22, 22-23 n 6).

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                              - 14 -                         No. 139
has made clear that the FLSA, which "defines the verb 'employ'
expansively to mean 'suffer or permit to work,' (52 Stat. 1060, §
3, codified at 29 U.S.C. §§ 203(e), (g)" has "striking breadth"
and "stretches the meaning of 'employee' to cover some parties
who might not qualify as such under a strict application of
traditional agency law principles" (Nationwide Mut. Ins. Co. v
Darden, 503 U.S. 318, 326 [1992]; see Rutherford Food Corp., 331 U.S.
at 728-729).   Thus, Brukhman is not controlling here.
          The State contends that WEP workers cannot be employees
because their assistance depends on "economic need," measured by
"specific household expenses," and on "household size," rather
than on the type of work done or the workers' skill.     There is no
reason, however, why the formula used to set a worker's pay
should affect whether or not he is an employee.     As the United
States Supreme Court stated in Alamo, what matters under the FLSA
is that, like Carver, the associates expected to receive in-kind
benefits in exchange for services and were dependent upon those
benefits (471 US at 301).
          The State also relies on language in the State laws and
regulations and the City's Employment Process Manual stating that
"the monetary grant . . . [for] participating in work-experience
activities is not a wage for the performance of such activities"
(and see 18 NYCRR § 385.9 [a][4]).     Such State law provisions,
however, cannot override the FLSA.     To the extent that any state
or city laws come into conflict with governing provisions of the

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                               - 15 -                       No. 139
FLSA, they are preempted (Matter of People v Applied Card Sys.,
Inc., 11 NY3d 105, 113 [2008]).
            Finally, the State attempts to sidestep two key factors
which indicate that WEP workers can be employees.    First, the
State contends that WEP workers' right to workers' compensation
benefits "has little if any significance" because volunteers also
have limited rights to such benefits.    Carver, however, is no
volunteer.    He worked full-time in the WEP program because he had
to if he wanted to receive his needed benefits.    Second, the
State argues that the work performed by Carver does not have true
monetary value because a WEP worker cannot replace the job of an
actual State employee.    However, regardless of whether Carver's
duties and responsibilities were identical to that of a non-WEP
State worker, he qualifies as an employee under the economic
realities test for FLSA purposes.
            The gist of Carver's argument is that he is entitled to
minimum wage for his hours worked as a participant in the WEP
program, and that the State cannot retroactively deprive him of a
minimum wage by recouping the funds through his lottery prize.
Carver's request is actually consistent with the current
practice.    As mandated by Social Services Law § 336-c (2)(b):
            "[t]he number of hours a participant in work
            experience activities authorized pursuant to
            this section shall be required to work in
            such assignment shall not exceed a number
            which equals the amount of assistance payable
            with respect to such individual (inclusive of
            the value of food stamps received by such
            individual, if any) divided by the higher of

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          (a) the federal minimum wage provided that
          such hours shall be limited as set forth in
          subdivision four of section three hundred
          thirty-six of this title, or (b) the state
          minimum wage."
Carver's particular situation compels the conclusion that he is
entitled to minimum wage.    While participating in the WEP
program, Carver worked 35 hours per week, and the State concedes
that this is not the norm.    Additionally, the State's actions
here led to a particularly unfair result in that Carver was taxed
on the full amount of his $10,000 lottery winnings, while being
forced to surrender half of those winnings to the State.
          Accordingly, the judgment of the Supreme Court appealed
from and the order of the Appellate Division insofar as sought to
be reviewed, should be affirmed, without costs.

                               - 16 -
Matter of Walter E. Carver v State of New York et al.
No. 139

ABDUS-SALAAM, J.(dissenting):
          The majority holds that petitioner Walter E. Carver,
who received government assistance under the City of New York's
work experience program ("WEP"), was an "employee" of the City
within the meaning of the federal Fair Labor Standards Act
("FLSA") (see 29 USC §§ 201 et seq.), and that therefore the
minimum wage provisions of that statute entitle him to withhold a
portion of his lottery winnings that would otherwise be owed to
the New York State Office of Temporary and Disability Assistance
("OTDA") pursuant to Social Services Law § 131-r.      Tellingly, the
majority does not dispute that FLSA and the Personal
Responsibility and Work Opportunity Reconciliation Act ("PRWORA")
(see Pub L 104-193) do not expressly declare that public
assistance recipients who must meet work requirements are
employees of the government for FLSA purposes.      Nor does the
majority contend that the legislative history of those statutes
reveals that Congress viewed petitioner and other such public
assistance or "workfare" recipients as government "employees" who
could obtain the benefits of FLSA.      Rather, in the absence of
clear textual or historical support for its conclusion that WEP
participants are City "employees" within the meaning of FLSA, the

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                               - 2 -                         No. 139
majority maintains that an evaluation of petitioner's
relationship with the City under the "economic reality" test,
which the United States Supreme Court has adopted to determine
whether an individual is the type of "employee" that Congress
meant to protect via FLSA (see Goldberg v Whitaker House
Cooperative, Inc., 366 U.S. 28, 33 [1961]), reveals that he is
protected by FLSA.
          However, while courts should employ the economic
reality test to ensure FLSA coverage for the broad class of
individuals whom Congress truly meant to protect under the
statute, the test cannot be used as a mere device to skip over
the glaring lack of any legislative support for the extension of
the statute's minimum wage provisions to public assistance or
workfare recipients.   Indeed, the economic reality test "does
have its limits," and chief among them is the principle that the
application of the test must be "consistent with congressional
direction" (Tony & Susan Alamo Foundation v Secretary of Labor,
471 U.S. 290, 295-296 [1985], quoting Mitchell v Lublin, McGaughy &
Associates, 358 U.S. 207, 211 [1959]).   Consonant with that most
important limitation, the United States Court of Appeals for the
Tenth Circuit has concluded that Congress did not intend to
confer the protections of FLSA upon public assistance recipients
simply because those individuals must meet certain conditions and
engage in work activities in order to continue receiving
government benefits (see Johns v Stewart, 57 F3d 1544, 1558 [10th

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Cir 1995]).   Thus, as the Tenth Circuit's analysis demonstrates,
and as the text and history of the relevant statutes show,
petitioner and other similarly situated individuals are not
"employees" within the meaning of FLSA, but instead receive
government benefits in exchange for performing tasks relevant to
the goals of PRWORA.   Because the majority's contrary holding
runs afoul of that persuasive authority and does not comport with
any sort of reality, economic or otherwise, I respectfully
dissent.
                                I.
           The text and history of FLSA and PRWORA refute the
majority's conclusion that, in enacting those statutes, Congress
placed local governments and beneficiaries of government
assistance in an employee-employer relationship that falls within
the scope of FLSA.   Regarding FLSA, that statute establishes,
among other things, a minimum wage and a maximum number of work
hours for any covered "employee," and the statute unhelpfully
defines that critical term as "any individual employed" -- that
is, "suffer[ed] or permit[ted] to work" -- by "an employer" (29
USC §§ 203 [e] [1]; 203 [g]; see 29 USC §§ 206 [a] [1]; 207 [a]).
In adding context to the vague term "employee," the statute
specifies that some people who perform work for the government
are protected "employees," but, significantly, it does not list
public assistance recipients among them; rather, the statute
lists a variety of traditional government positions which would

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                                - 4 -                        No. 139
entitle their occupants to the protections of FLSA, and nothing
on that list mentions, applies to, or describes public assistance
recipients in a manner that would qualify them as statutory
"employees" (see 29 USC §§ 203 [e] [2] [A] - [e] [2] [C]).     In
fact, the statute does not refer to the recipients of government
assistance at all, belying the majority's contention that the
statute sets the wages and working conditions of those to whom
the government gives benefits in exchange for their satisfaction
of work-related requirements.
          Nor does it seem that Congress had recipients of
government benefits in mind when it passed and then amended FLSA
over the years, for Congress appears to have focused primarily on
rooting out abusive labor practices in traditional employment
relationships established by commercial enterprises and their
non-profit or governmental equivalents.   In its official
declaration of the policy behind FLSA and its amendments,
Congress expressed concern that "industries engaged in commerce
or in the production of goods for commerce" had established
"labor conditions detrimental to the maintenance of the minimum
standard of living necessary for health, efficiency, and general
well-being of workers," which conditions were harmful to, and
spread via the abuse of, interstate commerce (29 USC § 202 [a]
[emphases added]).   As a result, FLSA made it the policy of the
federal government "to correct and as rapidly as practicable to
eliminate the conditions above referred to in such industries

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without substantially curtailing employment or earning power" (29
USC § 202 [b] [emphasis added]).
          Upon the initial passage of FLSA in 1938, President
Roosevelt likewise suggested that FLSA was intended to address
the abuse of laborers who had been hired by commercial
enterprises to produce goods in exchange for a wage, rather than
assistance recipients, for he described FLSA as necessary
legislation to combat "the evil of child labor" and "the
exploitation of unorganized labor," which were incompatible with
[e]nlightened business" and would allow "[g]oods produced under
conditions which do not meet rudimentary standards of decency" to
"pollute the channels of interstate trade" (HR Rep 93-913 at 2818
[1974] [quoting the 1938 speech without attribution]).
Subsequent amendments to FLSA also reflected Congress's desire to
protect traditional commercial workers, not public assistance
recipients, as Congress increased the minimum wage and expanded
FLSA's coverage to student workers, retail workers and domestic
service workers (see 88 Stat 62; HR Rep 93-913).   Along those
lines, upon debating the 1974 amendments to FLSA, Senators did
not once mention public assistance recipients or similar
individuals, instead focusing on the plight of child laborers on
farms, domestic workers, firemen and the like (see 120 Cong Rec
S4691-4702 [daily ed March 28, 1974] at 43-45).
          Even when congressional reports condemned those who
sought to use misleading labels or hidden arrangements to

                              - 5 -
                               - 6 -                         No. 139
disguise the type of employer-employee relationship to which FLSA
would obviously apply, they did not make any reference to public
assistance recipients, either in general or in the context of
state programs that feature work-related requirements for the
acquisition of assistance.   Instead, Congress sought to remedy
situations where commercial employers established labor
arrangements with students and minors, who would otherwise be
covered by the statute, and yet improperly tried to hide the true
nature of those employer-employee relationships to avoid
complying with the statute (see 120 Cong Rec S4691-4702 [daily ed
March 28, 1974] at 37-42).   Therefore, the text and history of
FLSA reveal that, in general, the statute covers only ordinary
wage earners hired by private and public employers to send goods
and provide services via the channels of interstate commerce, and
that public assistance beneficiaries are not covered.
          In the same vein, PRWORA does not apply the provisions
of FLSA to participants in workfare programs administered under
the statute.   Although PRWORA does expressly grant the
protections of some other federal statutes to participants in
programs funded pursuant to that law, FLSA is not among them (see
42 USC § 608 [d]; Pub L 104-193, tit IV, § 408 [c]), and
consequently, PRWORA does not bring workfare recipients within
the ambit of FLSA.   In fact, PRWORA distinguishes between
workfare participants and the sort of "employees" who might
qualify for the protections of FLSA in several notable ways.

                               - 6 -
                              - 7 -                          No. 139
          In that regard, while PRWORA compels individuals
receiving temporary assistance for needy families to
"participat[e] in work activities," such as unsubsidized
employment, subsidized employment, job training or work
experience (42 USC §§ 607 [d] - [d] [12]; Pub L 104-193, tit IV,
§§ 407 [d] - [d] [12]), the Act does not treat this "work
activities" requirement as some form of public sector employment
that might trigger the provisions of FLSA.   PRWORA neither labels
program participants as "employees" nor the state as their
"employer," and it contains measures crafted to place program
participants in actual "employment" in the private sector, as
distinct from the participants' existing positions as the
recipients of government benefits (see e.g. 42 USC § 604 [f]
[allowing states to use PRWORA funds to pay for agencies that
provide "employment placement services" to people who are not
employees but rather are "individuals who receive assistance
under the State program funded under this part"]; 42 USC § 608
[b] [2] [A] [i] [states must prepare individual responsibility
plan that "sets forth an employment goal for the individual and a
plan for moving the individual immediately into private sector
employment"]; 42 USC § 607 [d] [4] ["work experience" in
repairing public housing and similar roles qualifies as requisite
"work activities" only "if sufficient private sector employment
is not available"]; Pub L 104-93, tit IV, § 404 [f]; Pub L 104-
193, tit IV, § 408 [b] [2] [A] [i]; Pub L 104-193, tit IV, § 407

                              - 7 -
                                - 8 -                        No. 139
[d] [4]).   In addition, PRWORA refers to payments to program
participants as "assistance" (see 42 USC §§ 604 [f]; 607 [e]) or
"benefits" (42 USC § 601 [a] [2]) rather than wages paid to an
employee, and in imposing a penalty upon any participant who
fails to meet the mandatory work requirements, the statute
declares that such a penalty "shall not be construed to be a
reduction in any wage paid to the individual" (42 USC § 608 [c]
[emphases added]; see Pub L 104-193, tit IV, § 408 [c]), thereby
clarifying that participants are not employees who receive a wage
from the government.
            Moreover, the application of FLSA's minimum wage,
overtime and other provisions to workfare participants is
incompatible with PRWORA's primary goal of moving people off the
public assistance rolls and into unsubsidized regular jobs,
instead of making public assistance recipients state "employees"
who are guaranteed a minimum wage subsidized by the federal
government.1   As the Act's official statement of purpose puts it,
PRWORA is meant to "increase the flexibility of States in
operating a program designed to . . . end the dependence of needy
parents on government benefits by promoting job preparation, work
and marriage" (42 USC §§ 601 [a] - [a] [2]; see PL 104-193, §§

     1
        In passing similar legislation prior to PWRORA, the New
York Legislature also expressed a desire to reduce the number of
public assistance recipients in the State and encourage them to
transition to genuine full-time employment in the private sector
(see generally Bill Jacket, L 1990, ch 453; see also Bill Jacket,
L 1997, ch 436).

                                - 8 -
                               - 9 -                         No. 139
401 [a] - [a] [2]), and thus, Congress could not have intended to
limit states' flexibility in cutting benefits and incentivizing
departure from the public assistance rolls by forcing the states
to guarantee beneficiaries assistance in the amounts of the
minimum wages specified by FLSA.     Indeed, far from seeking to
make a generous offer of state "employment" to workfare
participants at a "wage" equivalent to FLSA's minimum wage, the
House members who supported PRWORA bemoaned the fact that, prior
to the Act's passage, public assistance recipients were allegedly
receiving benefits in excessive amounts far greater than the
salary of many regularly employed individuals, and they wished to
make the new workfare programs less generous, not more, than the
sort of ordinary employment to which FLSA's minimum wage
provisions would apply (see House Committee on the Budget Rep on
HR 3734 of 1996 at 4).   In short, the express terms of FLSA and
PRWORA do not apply FLSA's protections to workfare recipients,
and Congress plainly intended to establish the kind of
arrangement between the government and workfare beneficiaries
that would remove them from the ambit of FLSA.
                               II.
          The majority does not seriously contest the clear
evidence that Congress had no intention of turning participants
in PRWORA programs into government "employees" covered by FLSA,
but it insists that WEP participants qualify as government
"employees" within the meaning of FLSA under the economic reality

                               - 9 -
                                - 10 -                           No. 139
test (see majority op. at 8-15).      However, where, as here,
Congress's intent to exempt a class of individuals from the reach
of FLSA is plain from the text and history of relevant statutes,
the judge-made economic reality test cannot serve to confer
FLSA's protections upon those who Congress thought should not
receive the statute's benefits because, as previously noted, a
court must apply the test in a manner consistent with Congress's
intent (see Tony & Susan Alamo Foundation, 471 U.S. at 295-296; cf.
O'Connor v Davis, 126 F3d 112, 115 [2d Cir 1997]).      Indeed, as
will be explained herein, when the economic reality test is
properly applied in light of the legislative scheme, it leads to
the inescapable conclusion that petitioner is not a City
"employee" for FLSA purposes.
                                 A.
          The Supreme Court has not exhaustively defined the
parameters of the economic reality test or set forth any
particular list of factors to be considered in every case.
However, the Court has indicated that one must look at "the
circumstances of the whole activity" of the parties to discern
the economic reality of a person's status under FLSA (Rutherford
Food Corp. v McComb, 331 U.S. 722, 730 [1947]).      In conducting that
practical and comprehensive analysis, the Supreme Court has
focused on the individual's expectation of wages or in-kind
remuneration beyond what one might expect as a trainee or student
(see Tony & Susan Alamo Foundation, 471 U.S. at 299-300; Walling v

                                - 10 -
                              - 11 -                        No. 139
Portland Terminal Co., 330 U.S. 148, 150-153 [1947]), the
employer's ability to "expel [workers] for substandard work or
for failure to obey [workplace rules]" (Goldberg, 366 U.S. at 33),
and the employer's arrangement of its enterprise as a "device"
which is "transparent[ly]" designed to evade FLSA's strictures
(id.).   Similarly, the United States Courts of Appeals have
attempted to distill the Supreme Court's precedents and
Department of Labor regulations regarding the economic reality
test into a multi-factor framework, concluding that "the relevant
factors include 'whether the alleged employer (1) had the power
to hire and fire the employees, (2) supervised and controlled
employee work schedules or conditions of employment, (3)
determined the rate and method of payment, and (4) maintained
employment records.'" (Herman v RSR Sec. Servs., 172 F3d 132, 139
[2d Cir 1999], quoting Bonnette v California Health & Welfare
Agency, 704 F2d 1465, 1469 [9th Cir 1983]; see also Hodgson v
Griffin & Brand, Inc., 471 F2d 235, 237-238 [5th Cir 1973]).
           In Johns v Stewart (57 F3d at 1544), the Tenth Circuit
concluded that, under the economic reality test, workfare
participants in Utah were not the State's "employees" for FLSA
purposes (see id. at 1556-1559).   The court determined that,
because the workfare participants had to meet financial, training
and other criteria beyond the performance of work in order to
receive benefits, the participants were not receiving benefits as
a form of wage solely in exchange for work, and in light of the

                              - 11 -
                              - 12 -                         No. 139
unusual tax and payroll treatment of the participants' benefits
payments, Utah had not established a typical employment
relationship with those individuals (see id. at 1558-1559).
While the court recognized that not every aspect of the workfare
program differed from employment, the court eschewed reliance on
such isolated factors or any rigid application of a multi-factor
test, instead following "the Supreme Court's direction to focus
upon the circumstances of the whole activity and the economic
reality of the relationship" (id. at 1559).   Thus, observing that
"[t]he work component of [Utah's workfare programs] [wa]s just
one requirement of the comprehensive assistance programs," the
court concluded that, under the circumstances of the whole
activity of the State and the beneficiaries, "[t]he overall
nature of the relationship between [the workfare participants]
and [the State] [wa]s assistance, not employment" (id. at 1558).
          Johns persuasively shows that a workfare participant
generally cannot avail him- or herself of FLSA's minimum wage
specifications.   As Johns recognizes, under most workfare
programs, a state does not hire, fire and supervise employees or
pay them a wage in a traditional sense, but instead makes public
assistance beneficiaries meet many different criteria, such as
financial, family-related and work requirements, to obtain
government assistance and job training so that they can
transition into actual employment in the public or private
sector.   In addition, Johns makes the commonsense point that "the

                              - 12 -
                             - 13 -                        No. 139
circumstances of the whole activity" of workfare participants and
the government are fundamentally different from those of
employers and employees whose relationship is governed by FLSA,
notwithstanding that the two arrangements may share some
"isolated factors" in common (Rutherford Food Corp., 331 U.S. at
730).2
          Under the rationale of Johns and the relevant
considerations identified by the Supreme Court and the lower
federal courts, petitioner here was not an "employee" of the City
and hence was not entitled to collect a minimum wage under FLSA.
In particular, the City did not have the power to "hire"
petitioner to fill an existing position left vacant by layoffs or
other circumstances, as the law specifically forbids the City to
replace an actual City employee with a WEP participant (see
Social Services Law § 336-c [2] [e]; 42 USC § 607 [f] [2]).    And,
although the City had the power to reduce petitioner's benefits
based on his complete failure to participate in work activities
(see Social Services Law §§ 131 [5]; 336), the City could not
"fire" him in the sense of "expelling" him from the program based
solely on "substandard work or for failure to obey [workplace
rules]," as opposed to a complete refusal to work (Goldberg, 366

     2
        To be sure, Johns pre-dates PRWORA, but that is of no
moment because, as explained above, PRWORA actually strengthens
the rationale of Johns by revealing Congress's intent to place
workfare participants in a very different position than that of
an "employee" under FLSA.

                             - 13 -
                              - 14 -                         No. 139
U.S. at 33).
           Furthermore, petitioner could not have had any
expectation of remuneration of the kind that would make him a
City "employee," as he was more akin to a student or trainee who
trained for full-time employment in the ordinary workforce by
engaging in work activities as one of the conditions of receiving
government assistance (see Walling, 330 U.S. at 150-153).     Indeed,
both federal and New York law establish the clear expectation and
reality that petitioner was not earning a wage in exchange for
his work because the law declares that his benefits were not the
equivalent of wages (see 42 USC § 608 [c]; 18 NYCRR § 385.9 [a]
[4]; see also 42 USC §§ 604 [f]; 607 [e]), and the amount of his
benefits was not only based on the number of hours he worked, but
also on his needs and family size, which were matters unrelated
to his work activities (see Social Security Law §§ 131 [4],
131-a).3   Moreover, the City did not structure the WEP program as
a "device" to skirt FLSA's requirements and flood the channels of
interstate commerce with goods and services unfairly generated at
below-market rates in substandard labor conditions (Goldberg, 366
U.S. at 33).   Instead, the City makes petitioner and other WEP
participants perform job-related tasks in order to develop

     3
        In fact, unlike wages that can be freely spent by an
employee and taxed by the government, state and federal law place
significant restrictions on the taxation and expenditure of
workfare benefits (see 42 USC § [a] [12] [A]; 18 NYCRR 381.1; see
also 20 CFR 416.1124 [c] [2]; IRS Publication No. 525: Taxable
& Nontaxable Income [1995–2013 eds.]).

                              - 14 -
                              - 15 -                          No. 139
valuable skills for their planned departure from the program and
entry into genuine employment.
                                 B.
          The majority posits that, since petitioner did not
learn any skills in a classroom or participate in a formal and
systematic apprenticeship, the City used its professed desire to
train and educate petitioner as a charade to disguise an ordinary
employment situation subject to FLSA requirements (see majority
op. at 10-11).   However, petitioner's work experience in a
professional setting was no less educational than the process of
obtaining job skills via class work.   By taking part in the WEP
program, petitioner learned how to meet workplace expectations
such as timely arrival at a job site, how to interact
productively with colleagues, and how to complete his assignments
properly -- among the most essential and universal job skills.
In fact, petitioner's hands-on training may have been more
valuable to him than any academic discourse on professional
development.
          The majority also believes that, because the Social
Services Law calculates a WEP participant's work hours by
dividing the amount of his or her benefits by the minimum wage
(see Social Security Law § 336-c [2] [b]), the statute deems a
WEP participant's benefits to be wages, akin to the minimum wage,
which must be paid as part of an employer-employee relationship
covered by FLSA (see majority op. at 8).   But the New York

                              - 15 -
                               - 16 -                        No. 139
statute's use of the minimum wage as a numerical factor to be
considered in setting the work hours of WEP participants does not
remotely indicate that WEP benefits are wages or that the
Legislature meant to give participants the minimum wage.    To the
contrary, the Legislature may have simply sought to use the
number of hours that a minimum wage earner might work in exchange
for a particular amount of money as a convenient pre-existing
benchmark of a standard, fair number of working hours for WEP
participants, who need to adjust to such conditions that prevail
in the regular workforce which they hope to enter.    Surely, the
Legislature did not transform WEP participants into government
employees by choosing the expedient of a maximum hours formula
based on a familiar metric of appropriate working conditions,
rather than inventing a new formula from scratch.    Beyond that,
as the majority concedes (see majority op. at 9), this statutory
formula weighs against a finding that petitioner was a City
"employee" under FLSA because the statute, and not the City,
"determined the rate and method of payment" of petitioner's
benefits (Herman, 172 F3d at 139 [internal quotation marks
omitted]).
            The majority insists that WEP is akin to the thinly
disguised commercial enterprise at issue in Tony & Susan Alamo
Foundation v Secretary of Labor (471 US at 290), which enterprise
was found by the Supreme Court to be subject to FLSA (see id. at
295-303).    But, that case is readily distinguishable from the one

                               - 16 -
                               - 17 -                          No. 139
before us.    In Tony & Susan Alamo Foundation, a non-profit
organization with an avowed religious purpose operated a plethora
of "commercial businesses, which include[d] service stations,
retail clothing and grocery outlets, hog farms, roofing and
electrical construction companies, a recordkeeping company, a
motel, and companies engaged in the production and distribution
of candy" (id. at 292).    The workers at those businesses, called
"associates," were needy, homeless or drug-addicted individuals
ostensibly aided and rehabilitated by the organization (id.).
The organization gave the associates in-kind benefits, but not
cash, in return for their labors (see id.).    The Secretary of
Labor commenced a regulatory action against the organization,
asserting that, among other things, it "employed" the associates
within the meaning of FLSA and yet had not complied with FLSA's
minimum wage and overtime provisions (see id. at 293).    The
organization countered that: it was not an "enterprise engaged in
commerce" to which FLSA applied; FLSA coverage would violate its
rights under the Free Exercise Clause of the First Amendment; and
it was exempt from FLSA's strictures because the associates were
"volunteers," not "employees" within the meaning of FLSA (id. at
293-295).
            The Supreme Court held that the organization had to
comply with FLSA (see id. at 293-295, 299-303, 306).    First, the
Court concluded that, because the lower courts had appropriately
found that the organization ran commercial enterprises in

                               - 17 -
                                - 18 -                         No. 139
competition with other ordinary businesses, the organization was
a "commercial enterprise" subject to FLSA (see id. at 295-299).
Noting that it had "consistently construed the Act liberally to
apply to the furthest reaches consistent with congressional
direction," the Court determined that neither the organization's
expressed religious purpose nor its offer of services and food to
the associates removed it from the ambit of the statute because
both formal Department of Labor regulations and federal judicial
decisions had established that the religious or charitable nature
of an otherwise commercial enterprise did not serve to remove it
from the reach of the statute (id. at 296-299 [internal quotation
marks and citation omitted]).    Importantly, the Court observed
that "[t]he legislative history of the Act support[ed] this
administrative and judicial gloss," and the Court relied on
extensive legislative history showing that Congress intended to
regulate enterprises like the organization under FLSA (id. at
297-298).
            Furthermore, in the Court's view, the organization's
associates were "employees" under FLSA based on the overall
economic reality of their relationship with the organization (see
id. at 299-303).    The Court noted that, unlike students or
trainees, the associates "must have expected to receive in-kind
benefits -- and expected them in exchange for their services"
such that those benefits were "wages in another form" (id. at 301
[emphasis added]).    In addition to that expectation of wages, the

                                - 18 -
                              - 19 -                         No. 139
Court relied on a number of factors that supported its
determination that the associates were statutory "employees,"
including their many years of service and near-total dependency
on the organization, their long work hours, their payment "on a
'commission' basis," and their having been "'fined'" severely
"for poor job performance" (id. at 301 n 22).   Furthermore, the
Court rejected the notion that the associates could opt out of
the statute's coverage, declaring that a supposedly voluntary
waiver of the statute's protections would undermine the statute's
goal by ultimately driving down "wages" in "competing businesses"
(id. at 302).   Finally, the Court rebuffed the organization's
First Amendment argument and held that the associates could
receive the protections of FLSA (see id. at 303-306).
          Unlike the enterprise at issue in Tony & Susan Alamo
Foundation, WEP is not the sort of commercial enterprise that
FLSA seeks to regulate, as WEP does not compete with other
businesses in the production of goods or supply of services in
the channels of interstate commerce.   And, as discussed, WEP
participants like petitioner are not employees of the City
because, while they may expect to obtain government assistance
upon meeting a combination of work-related and other criteria,
they do not expect those benefits solely "in exchange for their
services" (id. at 301), as did the associates in Tony & Susan
Alamo Foundation.   Furthermore, although the City may penalize
WEP participants for failure to meet minimal requirements of

                              - 19 -
                              - 20 -                          No. 139
attendance and hours at work, the City does not, unlike the
organization in Tony & Susan Alamo Foundation, reward or punish
participants based on the quality of their work, as an ordinary
commercial employer might, by giving them benefits on a
"'commission' basis" or "'fin[ing]'" [them] heavily for poor job
performance" (id. at 301 n 22).   More fundamentally, in Tony &
Susan Alamo Foundation, the text and history of FLSA supported
the conclusion that the entity in question had to comply with
FLSA, whereas those authorities support the opposite conclusion
here.   It is not surprising, then, that the Tenth Circuit in
Johns observed that Tony & Susan Alamo Foundation was fully
consistent with the conclusion that workfare participants cannot
obtain the protections of FLSA (see Johns, 57 F3d at 1557, citing
Tony & Susan Alamo Foundation, 471 U.S. at 295).
           The majority's reliance on a Department of Labor
document expressing the view that workfare recipients are
"employees" within the meaning of FLSA is equally misplaced (see
majority op. at 8).   While the Department of Labor's views are
entitled to significant consideration based on its role as the
agency charged with administering FLSA (see Tony & Susan Alamo
Foundation, 471 U.S. at 297), the deference owed to the agency's
interpretation of the statute depends primarily on its "power to
persuade" (Christensen v Harris County, 529 U.S. 576, 587 [2000]),
and in this instance, the persuasive power of the Department's
document pales in comparison to the clear language, history and

                              - 20 -
                              - 21 -                         No. 139
case law demonstrating that workfare participants are not
government employees.4   So, too, administrative guidance carries
considerably less weight where, as here, it comes in the form of
a document that has not been issued as "a formal adjudication or
notice-and-comment rulemaking" (id.).5
          United States v City of New York (359 F3d 83 [2d Cir
2004]), cited by the majority (see majority op. at 11-12), is
inapposite.   There, the Second Circuit held that WEP participants
are covered by Title VII of the Civil Rights Act of 1964 (see id.
at 86-87), and in dictum, the court signaled that it might

     4
        Citing a Congressional conference report on 1997 budget
legislation, the majority claims that Congress "considered the
DOL's guidelines and accepted them" (majority op. at 8). But, in
the cited report, Congress merely mentioned the existence of the
Department's opinion on the subject of FLSA coverage for workfare
participants, noted the House's view that workfare participants
were not entitled to wages or a salary in any traditional sense,
and declined to pass any legislation addressing that specific
issue (see HR Rep No 105-217 [1997] at 434). Congress certainly
did not agree to enact the Department's guidance on this issue
into law, and its failure to invalidate the Department's
document, unlike the failure to overrule a binding Supreme Court
decision on the subject, is hardly a sign that the agency's
guidance has become the law of the land.
     5
        As the majority observes (see majority op. at 8 n 1), the
Department of Health and Human Services has issued a formal
regulation indicating that participants in programs governed by
PRWORA are protected by FLSA (see 45 CFR 260.35). But, the
Department of Health and Human Services is charged with joint
responsibility for interpreting PRWORA, not FLSA, and hence its
opinion on the meaning of FLSA is entitled to even less respect
than that of the Department of Labor. In any event, as
previously noted, the views of administrative agencies simply
cannot override the text, history and judicial interpretations of
FLSA.

                              - 21 -
                                - 22 -                       No. 139
endorse the Department of Labor's view that FLSA covers workfare
participants (see id. at 94).    Obviously, the dictum in City of
New York does not supply binding authority on the issue at hand,
nor is it even persuasive, as it merely restates the Department
of Labor's informal guidance without supplying significant
analysis of the text and history of FLSA and PRWORA relating to
this issue.   In addition, while Title VII, like FLSA, is not
among the statutes explicitly referenced by PRWORA, the Second
Circuit's determination that Title VII nonetheless applies to
workfare participants does not compel a similar conclusion with
respect to FLSA.   After all, some provisions of PRWORA reflect
Congress's desire to administer workfare programs on a non-
discriminatory basis (see e.g. 42 USC § 608 [d]), and as a
result, the application of Title VII protections to workfare
participants would not offend against the legislative intent
behind PRWORA in the same manner as the coverage of such
individuals under FLSA.   Indeed, given Congress's broad desire to
ensure that all assistance recipients would receive the job
skills they needed via work experience programs under PRWORA, it
is hard to imagine that Congress wished to leave the states free
to offer the benefits and responsibilities of PRWORA only to
certain people on a piecemeal, discriminatory basis.6

     6
        To the extent cases dealing with employment issues
outside the FLSA context are relevant, we should follow the logic
of our own decision in Brukhman v Giuliani (94 NY2d 387 [2000])
instead of the Second Circuit's decision in City of New York. In

                                - 22 -
                              - 23 -                         No. 139
          Finally, the majority's holding, in addition to lacking
any legal basis, may raise serious practical problems.   Under the
majority's rationale for deeming WEP participants to be City
employees, taxpayers may ultimately have to foot the bill for an
array of new expenses, including overtime, annual leave and sick
leave.   Collective bargaining rules may soon apply to all
workfare recipients, not just those who participate in a
subsidized public employment program with an outside employer
(see Social Services Law § 336-e), thereby stymieing the orderly
administration of WEP.   And, the City, State and federal
governments may have to reconcile the ordinarily tax-exempt
status of WEP participants' assistance payments with the
implication of today's decision that WEP participants essentially
earn those payments as the sort of "wages" that are generally
taxed in a regular employment context.   The majority may protest
that its holding can be confined in one way or another, but given
the majority's imaginative characterization of workfare and

Brukhman, we decided that WEP participants are not government
employees protected by the prevailing wage provision of the state
constitution (see Brukhman, 94 NY2d at 391-397). Although we
were careful to limit our holding to the interpretation of that
constitutional provision (see id. at 397), we reached the
conclusion that WEP participants are not City "employees" under
the constitution based on many of the same factors which
demonstrate that they are not City "employees" under FLSA,
including the lack of any salary paid to participants in direct
exchange for their services and WEP's goal of moving participants
from a government assistance program into genuine employment (see
id. at 395-396). In light of those factors and the others listed
above, petitioner and other WEP participants are not "employees"
of the City within the meaning of FLSA.

                              - 23 -
                               - 24 -                         No. 139
invocation of legal authorities from clearly distinguishable
contexts, attempts to limit the impact of the majority's decision
to this case and this minimum wage statute will prove difficult
at best and futile at worst.   I would avoid this mess and follow
existing law.7
                                III.
          In its effort to fit the square peg of assistance into
the round hole of employment under FLSA, the majority defies the
will of Congress, ignores the teachings of the Supreme Court and
needlessly creates a split in authority between this Court and
the Tenth Circuit.   Because the majority's decision sows
confusion in this important area of federal law, courts
throughout New York and, potentially, the Nation must now
struggle in vain to reconcile the majority's illogical holding
with the relevant legislative scheme and common sense, and thus
the majority's opinion will likely reverberate in unfortunate
ways throughout the legal system.      Since the plain language of
FLSA and PRWORA, as well as the legislative purpose behind those
statutes, show that WEP participants are not City "employees"
entitled to the protections of FLSA, I dissent and vote to
reverse the order of the Appellate Division.

     7
        It is unclear under the majority's decision whether the
government would ever be able to recoup lottery winnings from a
WEP participant, since the government does not recover wages that
it pays to employees. Presumably, even if petitioner had won a
multi-million dollar lottery prize, the majority would let him
keep every penny.

                               - 24 -
                                - 25 -                           No. 139
*   *   *   *   *   *   *   *     *      *   *   *   *   *   *     *   *
Supreme Court judgment appealed from and Appellate Division order
insofar as sought to be reviewed affirmed, without costs. Opinion
by Chief Judge Lippman. Judges Rivera, Stein and Fahey concur.
Judge Abdus-Salaam dissents in an opinion in which Judge Pigott
concurs.

Decided November 19, 2015

                                - 25 -