Overtime Lawsuit: What Home Care & Hospice Agencies Need to Know

Home Care Could Suffer if the New Rule Goes into Effect.

On December 26, NAHC released a follow up article regarding the victorious win in the lawsuit challenging the new overtime rules of the Department of Labor.  The article reads as follows:

An Update on The Overtime Lawsuit: What Does the Court Ruling Mean?

Following Monday’s court ruling in the lawsuit challenging the new overtime rules of the Department of Labor, NAHC had a discussion with the Department of Justice counsel representing DoL regarding the next steps in the case. The judge ruled that DoL’s regulations which excluded the application of the “companionship services” and “live-in domestic services” exemptions under the Fair Labor Standards Act to third-party employers, i.e. home care companies, were invalid.

NAHC asked that DoL agree to put a hold on the entire rule until the court could review the rest of our lawsuit’s claims. DoL refused to do so. While DoL previously decided not to enforce the rules for at least 6 more months, private enforcement by home care employees remains a serious risk.

For “live-in services,” this ruling will result in the continuation of the longstanding standards that home care business have applied to their operations.

However, for hourly or shift-based personal care services, the ruling is only one step towards maintaining the existing standards exempting such employees from both minimum wage and overtime requirements. The significantly revised definition of “companionship services” must still be addressed by the court.

If that revised definition is not invalidated before January 1, 2015, virtually all home care workers, other than live-ins, will become entitled to minimum wage and overtime provisions. The only such workers that would fall under the exemption would be those that predominately provide “fellowship” services with no more than 20% of work activities involving personal care or housekeeping tasks.

In an effort to address the definitional issue, NAHC has filed an emergency motion for a stay of the companionship services rule change. To succeed with that motion, NAHC needs to establish that home care will suffer irreparable harm if the new rule goes into effect along with a likelihood of success on the merits of our claim that the rule violates the FLSA. NAHC’s motion has been filed, and at this point it is in the hand of the judge.

The decision issued by the federal court on December 22, 2014 is a big win for home care, but much remains to be done to fully preserve the overtime exemptions for companionship services and live-in domestic services.

Below is a Q&A regarding some of the most important issues for home care and hospice agencies need to know to better understand the impact of the recent court decision and what it means to home care.

Q. What did the court rule?
A. The court ruled that the US Department of Labor violated the plain language of the Fair Labor Standards Act (FLSA) with its regulation that excluded third-party employers from the application of the “companionship services” and “live-in domestic services” overtime exemptions. Home care companies are considered third-party employers. Home care workers employed by the direct consumer of the care or their family members acting as the employer are the only parties that could have used the exemptions under the rule that was invalidated by the court. This does not change any state laws that already limit the exemptions or their application.

Q. Does this mean that home care companies do not have to pay hourly home care aides overtime?
A. No. The regulation also redefined companionship services, limiting that definition to fellowship services and no more than 20% of time on personal care or housekeeping tasks. The lawsuit also challenges that part of the new regulation as well. However, that part of the case has not yet been presented to the court. NAHC is preparing to do so.

Read more on the entire article.

Breaking News: Yesterday, William A. Dombi, VP for Law at NAHC had this news update… Today, the judge in the overtime lawsuit held a chambers conference. He has scheduled a hearing on our Motion for a Temporary Stay of the new rule defining “companionship services” for Wednesday, December 31. At that hearing he will be making a decision on the Motion.

HEALTHCAREfirst will keep you updated on this breaking story as it unfolds.