Supreme Court Leaves Home Care Rule in Place

Allen Smith, J.D. By Allen Smith, J.D. July 5, 2016

​​Home care workers are overtime eligible under the DOL rule.

A Supreme Court order letting stand a lower court's holding that home care workers are eligible for minimum wage and overtime pay—thanks to the home care rule—may hurt the workers' clients, according to a management attorney. But others welcomed the news as long overdue.

Prior to the Oct. 1, 2013, enactment of the Department of Labor's (DOL's) home care rule, nearly 2 million home care workers weren't eligible for minimum wage and overtime.

"Until this rule, this growing and increasingly important group of workers who provide compassionate and competent care to our aging parents and to family members with disabilities were left out of the American promise of a fair day's pay for a hard day's work," said Secretary of Labor Thomas Perez following the Supreme Court's June 27 order.

Christine Owens, executive director of the National Employment Law Project (NELP), also applauded the court's order, stating, "For the first time since the Labor Department erroneously exempted these workers from the Fair Labor Standards Act (FLSA) in 1975, America's home care workers—mostly low-income women of color—have unequivocal assurance that the law is on their side."

While the DOL and home care advocates welcomed the Supreme Court's denial of review, Angelo Spinola, an attorney with Littler in Atlanta, predicted that enforcement of the rule would lead to less continuity of care and more individuals with disabilities moving to nursing homes.

Many home care agencies will reduce workers' overtime pay by scheduling more caregivers in shorter shifts to the same client, creating less continuity of care, he said. That's a problem particularly for patients with dementia, who function best when kept to a routine, Spinola added.

He said that some home care clients can't afford to pay home care workers overtime and that more clients wouldn't be able to live independently as a result.

Spinola also said the Supreme Court order would lead to more litigation. Already, the home care industry has seen "a huge spike in litigation" related to wage and hour compliance, according to Spinola. Home care agencies should "double down on compliance efforts," he said, and ensure that employees understand how to record their time.

Jim Swartz, an attorney with Polsinelli in Atlanta, agreed that wage and hour complaints against home care agencies have risen since the final rule took effect.

Rule's History

The home care rule narrowed the "companionship exemption" so that home care workers employed by third-party agencies are eligible for overtime pay but workers employed by consumers are not. The exemption was scaled back to cover those mainly in an "elder sitter" role. Home care workers newly eligible for overtime pay include certified nursing assistants, home health aides and personal care aides.

A Dec. 22, 2014, federal district court decision struck down the rule as an improper exercise of the DOL's authority, but the U.S. Circuit Court of Appeals for the D.C. Circuit reversed. The appeals court noted in its Aug. 21, 2015, decision that the DOL's original interpretation of who was exempt in 1975 came "at a time when the provision of professional care primarily took place outside the home in institutions such as hospitals and nursing homes. Individuals who provided services within the home, on the other hand, largely played the role of an 'elder sitter,' giving basic help with daily functions as an on-site attendant."

The appellate court also determined that the DOL acted reasonably by applying the minimum wage and overtime requirements to home care workers employed by third-party employers.

By not reviewing the case, the Supreme Court leaves the lower court's ruling in place.

Companions Employed Directly by Consumers

"Savvy consumers and providers of true companionship services most likely will look to avoid agency involvement altogether through Web-based services linking consumers with home care providers to avail themselves of the remaining, narrow exemption for companionship providers directly employed by consumers," Swartz said.

"Home care workers employed directly by the family may be exempt, but only if they provide fellowship and protection to an elderly or infirm individual and spend no more than 20 percent of their time providing care to that individual," explained Matthew Byrne, an attorney with Jackson Lewis in Cincinnati.

"This is a significant change from the previous regulations, which applied the [companionship] exemption to those providing fellowship, protection and care, and which only applied a 20 percent threshold to general household work," Byrne said. "These two changes—narrowing the exemption by directing it away from caregivers and toward what the department seems to view as an adult babysitting role, and barring third-party employers from using the exemption—significantly increase the number of home care givers who will need to be paid overtime."

Home Care Workers Relieved

Minimum wage and overtime already were due to home care workers under 21 state laws, said Sarah Leberstein, a senior staff attorney with NELP in New York City, during a NELP teleconference about the case.

Lisa Scott, a home care worker in El Dorado, Calif., said her life has improved since she started earning overtime. Before, she relied on food banks and had trouble paying for gas. Now, she earns an extra $300 a month and can afford fuel for her car, plus fresh fruit and meat, she said.

The Supreme Court's hands-off approach in the case is a "big step for workers and clients," said Nikki Brown-Booker, a home care consumer in Oakland, Calif. Brown-Booker said it's important to provide wages that fend off home care workers' high turnover. Without home care workers, Brown-Booker would not be able to stay in her home and live independently, she noted.

Angelina Del Rio Drake, executive coordinator with the Paraprofessional Healthcare Institute in the Bronx, N.Y., observed that half of home care workers are in families earning less than the poverty level. She said the turnover rate in the profession is 50 percent a year and noted that from 2012 to 2022, 1 million more home care aides would be needed. With little actual growth in the care population and the numbers of the elderly growing, there is concern about a "care gap," she said. She applauded the Supreme Court for leaving the lower court decision in place, predicting it would lead to a more stable workforce and greater continuity of care by reducing turnover.

This case is Home Care Ass'n of Am. v. Weil, No. 15-683. ​



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