Home Health & Hospice Week

Industry strikes out at delay attempt.

Get ready to apply FLSA minimum wage and overtime rules to all your employees Oct. 13, unless the U.S. Supreme Court intervenes.

Recap: On Aug. 21, the U.S. Court of Appeals for the District of Columbia overturned an earlier federal district court ruling that had invalidated part of a new Department of Labor rule eliminating the Fair Labor Standards Act overtime exemption for home health agency workers (see Eli’s HCW, Vol. XXIV, No. 3). The rule would not allow home care workers employed by a third party to qualify for the companionship exemption to overtime and minimum wage requirements.

Plaintiffs in the lawsuit, including the National Association for Home Care & Hospice, are petitioning the Supreme Court to hear an appeal in the case. In the meantime, they asked the appeals court for a stay, which would have postponed the Oct. 13 implementation date for elimination of the companionship exemption. But on Sept. 18, the court denied the motion.

What now? NAHC and the other plaintiffs will file “a request for a stay directed to the U.S. Supreme Court,” the trade group explains to members. “A stay would put the new rules on hold until the Supreme Court has the opportunity to review the Petition for Writ of Certiorari that NAHC and its coplaintiffs are preparing to file. Otherwise, the rules will go into effect while the Supreme Court considers whether to hear the appeal.”

DOL said in the Sept. 14 Federal Register that it will offer a 30-day grace period after the elimination goes into effect before enforcing the rule. And “through December 31, 2015, the Department will exercise prosecutorial discretion in determining whether to bring enforcement actions, with particular consideration given to the extent to which States and other entities have made good faith efforts to

bring their home care programs into compliance with the FLSA since the promulgation of the Final Rule,” it added in the notice.

“The combination of these two enforcement policies might result in USDOL’s effectively engaging in little to no enforcement activity in 2015 where the regulatory changes are concerned,” notes attorney Ted Boehm with law firm Fisher & Phillips.

“However, these policies will not preclude current or former employees from commencing their own FLSA lawsuits based upon the revisions,” Boehm says in analysis.

It’s that loophole that makes the DOL’s nonenforcement policy basically useless for home care providers, legal experts point out. “Private lawsuits may even claim liability dates back to January 1, 2015 if DOL’s Home Care Rule applies retroactively,” warns attorney Eileen Maguire with Gilliland Maguire & Harper in Indianapolis.

Prepare For Elimination

“If you are still operating under the prior status quo, where live-in home care workers and employees were exempt from certain FLSA protections regardless of who employed them, you will want to review this issue again,” urges attorney Elizabeth Gotham with law firm Honigman Miller Schwartz & Cohn.

Whether the Supreme Court will grant a stay is unclear. “No one can predict the outcome of Plaintiffs’ request for a stay at this time,” Maguire says.

“NAHC advises affected home care companies to prepare for both of the litigation outcome possibilities: that the rules are stayed or that the rules go into effect,” the trade group says. “While such business planning is not easy, the path of litigation is not fully predictable.”

If the industry does win a stay and the Supreme Court agrees to hear the appeal, then agencies still must prepare for eventual elimination of the exemption. An industry victory is far from assured.

“Given the DOL’s broad discretion, as reaffirmed by the D.C. Circuit, the new rule is likely here to stay,” Gotham predicts. “Home care agencies and other third-party employers are well advised to audit their current practices to ensure compliance with the DOL’s new interpretations and guidance.” But other legal experts tell Eli they are hopeful for a successful appeal.

Either way, “a decision on whether to accept or deny review by the U.S. Supreme Court could take 60 to 90 days from Plaintiffs’ filing date. Plaintiff’s petition for review has not yet been filed,” Maguire notes.

Alternative: “NAHC and its home care collaborative are developing a legislative proposal that has the interest of both houses of Congress,” which will be introduced very soon, the trade group says.

Note: See the DOL’s notice at www.gpo.gov/fdsys/pkg/FR-2015-09-14/pdf/2015-23092.pdf.