Steps in Home Care Inc. has filed for Chapter 11 bankruptcy protection in anticipation of being sued for federal labor law violations.
The White Plains home health care company petitioned U.S. Bankruptcy Court on May 1, declaring up to $50,000 in assets and liabilities.
The “immediate need for relief from this court,” CEO Jennifer Baukol stated in a declaration, “stems from a threatened class action lawsuit under the Fair Labor Standards Act that will severely affect the cash flow of the company and lead to its inability to address ongoing obligations.”
Steps in Home Care was founded in 2011 and has offices in Stamford, Connecticut and Garden City, New York. It is owned by Baukol, of White Plains, and her sister, Lisa Wade, of Irvington.
It offers home companions, basic assistance, skilled nursing and concierge services, such as driving patients to appointments and managing insurance claims.
Steps in Home Care was an honoree in Westfair Communication’s 2019 Family-Owned Business Awards.
The company hires only experienced caregivers, according to its website, pays “industry-leading rates” and offers better benefits “to set ourselves apart from our competitors.”
Steps in Home Care employs 83 people, according to the petition, but the company notified more than 1,100 individuals of the bankruptcy case.
The company does not explain why it thinks it will be sued under the Fair Labor Standards Act, which regulates the minimum wage and overtime pay.
In 2017, Steps in Home Care was sued under the labor law by Teresa Fuentes Diaz of the Bronx. She worked as a home health aide from mid-2015 to late 2017, beginning at $9.90 an hour and ending at $10.76.
Diaz claimed that she typically worked 144 hours a week – including several 24-hour shifts – but was paid for 78 hours.
Steps in Home Care denied the allegations. In 2018, the dispute was settled with the company agreeing to pay Diaz $6,638.
The company expects revenue of $400,000 in May, Baukol’s bankruptcy declaration states, and $350,000 in expenses.
In 2018, according to a federal tax return included with the petition, the company booked revenue of $5.2 million and income of $93,299. Its biggest expense was more than $3 million in salaries and wages.
Compensation for officers was listed at $0 in 2018 and $540,000 in 2017.
The company is represented by Manhattan attorney Lawrence F. Morrison.