Home Health & Hospice

Court overturns DOL's 'onerous' new overtime requirements

Homecare Insider, December 29, 2014

Last Monday, the National Association of Home Care & Hospice (NAHC) saw victory when the U.S. District Court for the District of Columbia vacated “onerous” new overtime provisions from the U.S. Department of Labor (DOL) that were slated to take effect later this week.

The lawsuit—filed by NAHC, the International Franchise Association, and the Home Care Association of America—challenged a rule that would prohibit the application of two overtime compensation exemptions: companionship services and live-in domestic services. The rule would have applied when caregivers were employed by anyone except the direct consumer of their services, thereby affecting 90% of care, according to NAHC. In addition, the trade association states that this change would have carried higher care costs to be shouldered by consumers and financially struggling government funding programs (e.g., Medicaid).

“What this means is that the rule, which would have taken affect January 1, 2015, will be set aside and that older Americans will once again enjoy access to personal care assistance in their own homes,” Val J. Halamandaris, President of NAHC and a plaintiff in the lawsuit, said in a statement.
However, NAHC doesn’t consider the court’s decision a total triumph. After the ruling, the trade association asked the DOL to put a hold on the rule that contains the stricken overtime provisions until the court could review the rest of the lawsuit, which also challenges the “significantly revised” definition of “companionship services.” The DOL refused.
“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,” NAHC wrote in a follow-up statement. “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.” To address this issue, NAHC has filed an emergency motion for a stay of the companionship services rule change.
Previously, after receiving multiple requests to postpone the effective date of its requirements, the DOL announced it will instead preserve the January 1, 2015, effective date for the rule but suspend its enforcement for six months (through June 2015) and for the subsequent six months will exercise prosecutorial discretion in enforcing the new requirements based on “good faith efforts” to comply.

To read official court documents about the lawsuit decision, click here and here.