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Battle over new overtime pay regulations for direct care workers continues

SHERRY KARABIN
Legal News Reporter

Published: April 23, 2015

They provide key functions like helping an elderly or ill person to bathe, dress, or get to the doctor and now a court battle is underway over whether many of these direct care workers qualify for overtime.

New overtime regulations for these employees were set to take effect this year as part of the U.S. Department of Labor’s (DOL) efforts to update the rules concerning who qualifies for overtime protections and who is “exempt” under the Fair Labor Standards Act.

But a federal judge in the U.S. District Court for the District of Columbia issued two separate decisions that could keep the DOL changes from ever becoming a reality, setting the stage for a protracted battle in the case of Home Care Association of America, et al., v. David Weil, et al.

As Harrington, Hoppe & Mitchell partner Martin Boetcher explains under the FLSA if an employee meets certain requirements, the person is classified as “exempt,” which means that a company is not bound by the minimum wage and overtime pay rules of the act.

According to the DOL website, direct care workers are those who provide home care services including certified nursing assistants, home health aides, personal care aides, caregivers and companions.

Boetcher said one of the new DOL regulations “redefined the ‘companionship exemption’ to include primarily those employees who perform duties related to ‘fellowship’ and ‘protection.’ Before the change, almost any type of service or home care work provided to an elderly or ill person was covered,” said Boetcher.

Jackie Ford, a labor and employment partner who works out of the Columbus and Houston offices of Vorys, Sater, Seymour and Pease explained the DOL also stated that “in order to fall within the exemption the employee could only provide care other than fellowship or protective services 20 percent of the time.”

For example, she said if the employee administers “care” such as dressing, grooming, feeding, toileting, meal preparation, driving, light housework and assistance with taking medications for more than 20 percent of the workweek the exemption would be lost for that week.

As a result, the attorneys said under the new regulations most direct care workers would not fall under the exemption and would have to be paid at least the federal minimum wage and time and a half for any hours over 40 in a given workweek.

Boetcher said the DOL also changed the rules so that exemptions to overtime for companionship and live-in domestic service employees would be limited to individuals, families and households who employ such workers. Third-party employers of direct care workers, such as home care staffing agencies, would not have been able to claim either exemption.

“The DOL argued that the old rules dated back to the ‘70s and should be updated given the increase in the aging population,” said Boetcher. “Home healthcare companies advocated against the changes.”

On Dec. 22 U.S. District Court Judge Richard Leon struck down the rule limiting the companionship exemption to individuals, families and households.

The same judge issued a temporary restraining order on Dec. 31, 2014, blocking the new narrow definition of companionship services from taking effect for 14 days.

In a Dec. 31, 2014 press release, the National Association for Home Care & Hospice praised the judge’s decisions.

“This means that our most vulnerable citizens get at least a temporary reprieve from what would otherwise have become a significant cost barrier to paying for help at home for their chronic diseases,” said National Association for Home Care & Hospice Chair Andrea Devoti. “Without this relief, many seniors would be pushed into institutional care.”

On Jan. 14, Judge Leon granted summary judgment to the plaintiffs, stating the DOL regulation was invalid since it conflicted with the statute enacted by Congress, explained Boetcher.

“The court said that only Congress had the right to change this statute,” said Boetcher.

The DOL is appealing both decisions in Home Care Association of America, et al. v. David Weil, et al. to the U.S. Court of Appeals for the District of Columbia Circuit.

“Most of the cost associated with these types of services is not borne by the individuals, but by government programs like Medicaid so there was a lot of concern about further tapping into this financially-strapped program,” said Ford.

“Agencies could have gotten around the overtime issue by hiring additional workers but that may have been disruptive to the relationships that are developed in home health situations.”

Ford said the question before direct care employers right now is how to proceed.

“Given that the case is being appealed agencies will have to decide whether to follow the old rules that are currently in effect or whether to begin to put procedures in place to accommodate potential changes,” she said.

Depending on the ultimate outcome, Ford said the case might impact the overall scope of authority of the DOL.

“The case could answer whether the DOL has the power to amend Congressional statutes or whether Congress retains that right exclusively.”


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