Home Health & Hospice

Judge decision finalizes striking of DOL overtime rule

Homecare Insider, January 19, 2015

Last Wednesday, a federal judge ruled that the Department of Labor (DOL) cannot extend overtime and wage protections to currently excluded homecare workers by redefining the term “companionship services.”
The ruling closes the books on a lawsuit filed by the National Association of Home Care & Hospice (NAHC), the International Franchise Association, and the Home Care Association of America. The suit challenged a rule that would have prohibited many employers from using two longstanding overtime compensation exemptions: companionship services (which many homecare workers provide) and live-in domestic services.
The rule would have applied when caregivers were employed by anyone other than 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).
In his decision, Washington D.C. District Court Judge Richard Leon stated that the DOL’s intended definitional revisions must be implemented through the legislative process with the approval of Congress, rather than via the regulatory process, as it had proceeded. 
“This decision is a huge victory for patients and their families who will be able to continue receiving home care services without interruption,” said Denise Schrader, chairman of the NAHC board, in a celebratory statement released by the trade association following the ruling. “The decision is a huge victory for caregivers who will continue to be protected instead of being forced to work only part time. The decision is likewise a huge victory for the agencies that serve patients and employ caregivers, and who will see continuity in a rule that has been in effect for 40 plus years and had recently been sustained by the U.S. Supreme Court.”
But not all stakeholders are invigorated by the court’s decision. Labor rights organization Paraprofessional Healthcare Institute (PHI) expressed dismay over the ruling, stating it will deny workers the right to basic protections afforded employees across other industries. 
“We are deeply disturbed by Judge Leon’s decision,” said Jodi M. Sturgeon, president of PHI, in a statement. “After three full years, the regulatory process has run its course, and America’s 2 million home care workers should not have to wait any longer for fair pay.”
The rule, originally slated to take effect on January 1, was previously halted by the court’s issuance of a temporary restraining order in late December.
The DOL has not yet decided whether it will appeal Judge Leon’s decision, though it announced in a statement that it’s currently exploring its legal options.
Read Homecare Insider’s previous coverage of the lawsuit here and here.