The Matter of Walter E. Carver v. State of New York
Petitioner Carver, a 69-year-old Vietnam War veteran, participated in the City of New York's Work Experience Program (WEP) from 1993 to 2000, performing tasks like sorting mail and sweeping floors in exchange for public assistance and food stamps. In 2007, after winning $10,000 in the New York State Lottery, the State, through OTDA, recouped $5,000 under Social Services Law § 131-r (1) to reimburse itself for past public assistance benefits. Carver initiated a CPLR article 78 proceeding, alleging this recoupment violated his rights under the federal Fair Labor Standards Act (FLSA) and the New York State Minimum Wage Act, arguing that the recoupment effectively reduced his compensation below minimum wage, as he was an "employee" under the FLSA. The Supreme Court initially dismissed his claim, but the Appellate Division reinstated the FLSA cause of action, applying the "economic reality test" and concluding that WEP participants are FLSA employees. The New York Court of Appeals affirmed the Appellate Division's decision, holding that the City should be considered Carver's employer under the FLSA's "economic reality test" due to factors like control over work, supervision, and maintenance of records, and that WEP workers are entitled to minimum wage protections, thus preventing the State from retroactively depriving Carver of minimum wage through benefit recoupment.