Home Health & Hospice Week

Nation's highest court sides with industry on the companionship exemption.

Home health agencies could be off the hook for major overtime and minimum wage burdens, thanks to a recent U.S. Supreme Court development.

The Court on Jan. 23 vacated a 2nd U.S. Circuit Court of Appeals judgment from July 2004 that shot down the companionship exemption for home care aides employed by third-party companies rather than the clients themselves.

The Court ordered the lower court to reconsider the decision, Evelyn Coke v. Long Island Care at Home, in light of new Department of Labor Wage and Hour Division instructions issued last month.

In other words, "the Court decided to hear the case and immediately issued its decision," explains William Dombi, vice president for law with the National Association for Home Care & Hospice's Center for Health Care Law.

The action is "a big win for home care agencies," cheers labor law attorney John Gilliland II with Gilliland Markette Milligan in Indianapolis. The development is especially welcome by private duty providers, who furnish lots of companionship services.

The companionship exemption to the federal Fair Labor Standards Act allows home care providers not to apply minimum wage and overtime requirements to workers who furnish personal, non-medical services for the elderly or infirm (for more exemption information, see related story later in this issue). Case Tests Exemption Home care attendant Evelyn Coke sued her employer, Long Island Care at Home Ltd. and its owner, for overtime and minimum wage pay and appealed an unfavorable district court decision.

Coke acknowledged the lawsuit was a "test case" to challenge the companionship exemption regulation on its face, and a labor union attorney represented her in the suit.

In a July 22, 2004 decision, the Appeals Court sided with Coke on the exemption for third-party employers and vacated and remanded that part of the lower court's decision. That meant for states in the Second Circuit--Connecticut, New York and Vermont--the exemption was invalid.

Long Island Care filed a Supreme Court appeal in March 2005 and a number of organizations including the Home Care Association of New York State and NAHC filed "friend of the court" briefs in the case. The U.S. Solicitor General, upon the Court's invitation, also filed a brief recommending reversal of the Appeals Court's ruling (see Eli's HCW, Vol. XV, No. 2).

Agencies nationwide have been eager to see the outcome of the case because they were worried they could lose the companionship exemption as well, notes attorney Claudia Schlosberg with Blank Rome in Washington, DC.

That could leave them having to pay minimum wage and overtime to home care attendants providing companion services. Even worse, they could be liable under major back pay lawsuits. Future Looks Bright For Exemption Now the Supreme Court [...]