Earlier this year, we brought news that the US Dept. of Labor (DOL) had revised its regulations applicable to home health care workers. Those regulations, which related to domestic workers who provide “companionship services,” narrowed significantly the classes of workers who were exempt from the minimum wage and overtime protections of the FLSA by removing the ability of home health care agencies to claim any exemption, as well as redefining which activities constitute “companionship services.” The regulations were a sweeping change in the industry, especially after nearly forty (40) years of the availability of the exemption for these workers. In response, trade associations challenged the regulations in court, and the D.C. District Court invalidated the regulations, which was appealed by the DOL.
On Aug. 21, 2015, the D.C. Circuit Court determined that the DOL’s overtime regulations for home health care workers should be reinstated. First, the appellate court addressed the DOL’s removal of third-party home health care agencies’ ability to claim any exemption from minimum wage and overtime obligations. The appellate court disagreed with the lower court’s determination that the language of the FLSA “unambiguously” declared that third-party agencies should be able to claim the exemption for their workers. Second, in light of that finding, the appellate court considered whether the DOL had made a reasonable interpretation of the statute by redefining the types of “employers” that may claim the exemption. The DOL had solicited comment from the public, and some stakeholders cited a projection of significantly increased costs for both the agencies and for those who must use home health care services. The appellate court found that the DOL was entitled to disregard those comments where those stakeholders provided no hard evidence of the increased costs. Under the broad authority provided to the DOL when Congress amended the FLSA back in 1974, the DOL was permitted to make its own judgments in crafting the revised third-party regulations about the effects of its proposed regulations after receiving the comments. Finally, because the appellate court reinstated the third-party regulation, the trade associations lost “standing” to make any further challenge to the DOL’s changed definition of “companionship services.” This means that, as third-party agencies, they never would be entitled to challenge the narrowed scope of activities that comprise “companionship services.”
The DOL has not yet issued any statement with regard to when it will begin enforcing the regulations, and similarly there has been no word on whether there will be any further challenge made by the trade associations. Thus, home health care employers who do not fit within the regulations’ narrowed exemptions now will be required to adhere to the minimum wage and overtime requirements of the FLSA.
Shayla N. Waldon is an associate with Ackerman, focused primarily on employment and commercial litigation, as well as handling broker-dealer representation. She has experience in drafting employee handbooks to comply with the law of multiple states.
