Takeaway: U.S. Supreme Court case law has removed the deference that courts used to afford to agency interpretations of laws. Yet this case law did not invalidate the U.S. Department of Labor’s (DOL’s) determination that the Fair Labor Standards Act’s (FLSA’s) overtime requirement applies to home care services.
The 6th U.S. Circuit Court of Appeals has upheld the U.S. Department of Labor’s (DOL’s) 2013 regulation requiring home care service companies to pay overtime.
A home health care company, Americare Healthcare Services, and its owner operated in Ohio, providing services to elderly and disabled clients through the state’s Medicaid waiver programs. Americare served a specific population of Nepali Ohioans who, based on cultural and religious beliefs, were unlikely to accept care from anyone other than a close family member. Americare mostly employed family members to treat their clients, but a small percentage of its workers were not client family members.
The DOL claimed that, from October 2018 to September 2019, Americare and its owner paid its workers a consistent hourly rate but did not pay them overtime. Records showed that at least one attorney had advised Americare’s owner that he should pay overtime to workers and that, as of July 2018, the owner paid overtime to employees of his other company, Intra-National Home Care.
In September 2019, Americare began paying overtime to workers by varying their hourly rates individually based on the number of hours they worked in a given week, then paying overtime according to the lower rate. The result was that each worker’s average hourly compensation remained the same, regardless of the number of hours each worked.
The DOL filed a Fair Labor Standards Act (FLSA) enforcement action against Americare and its owner in October 2021. Americare and its owner moved for partial summary judgment, contesting the DOL’s 2013 regulation concerning home care services, and its companionship services definition. The DOL moved for summary judgment on all claims.
The district court granted summary judgment to the DOL, holding that Americare and its owner were liable for FLSA violations, including willful overtime violations, that the 2013 DOL regulation was valid and enforceable, and that Americare and its owner lacked standing to challenge the companionship services definition. The defendants appealed to the 6th Circuit.
The 6th Circuit described how the FLSA was amended in 1974 to create a companionship services exemption from the requirements to pay minimum wages and overtime to employees in domestic service employment who provide companionship services for individuals unable to care for themselves because of age or infirmity. The act also created a live-in exemption that stated that the FLSA’s overtime requirements do not apply to any employee in domestic service who resides in the household. This act stated that the terms of companionship services exemption was to be “defined and delimited by regulations” of the DOL, and that the DOL could prescribe “necessary rules, regulations, and orders with regard to the amendments made by this act.”
In 1975, the DOL issued regulations that determined that third-party providers of companionship services, including home care services, fell within the exemption. In 2013, however, the DOL changed course and determined that third-party providers could not avail themselves of the exemption, and thus must pay minimum wages and overtime to their employees.
In 2024, the U.S. Supreme Court issued rulings that removed the deference that courts afforded federal agencies’ reasonable interpretations of ambiguous laws. As a result, Americare and its owner argued that the DOL’s 2013 regulation was not entitled to deference, and the courts should interpret the 1974 act as exempting them from paying overtime to their employees.
However, the 6th Circuit reasoned that the 1974 act did not define the terms it used in exempting certain employees from minimum wages and overtime. Rather, it expressly delegated the authority to interpret its terms and issue relevant regulations to the DOL, which used its authority to issue its 2013 regulations. As a result, the courts could not overrule the DOL’s regulation based on the express terms of the statute.
The court further found that the appellants did not have standing to contest the companionship services definition, because the 2013 regulations precluded third-party employers from falling under that definition.
A concurring judge also reasoned that, in a pre-2013 decision, the U.S. Supreme Court deferred to the DOL when it applied the exemption to third-party employers, and thus deference to the DOL must continue as a matter of precedence after the 2013 regulations.
The 6th Circuit thus affirmed the district court’s decision upholding the DOL’s 2013 regulations.
U.S. Department of Labor v. Americare Healthcare Services Inc., 6th Cir., No. 25-3128 (April 1, 2026).
Jeffrey Rhodes is an attorney with McInroy, Rigby & Rhodes LLP in Arlington, Va.
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