Home Health & Hospice Week

U.S. Appeals Court reverses companionship exemption decision.

The legal fight over elimination of the companionship exemption for HHA employees continues, with a new federal court decision dealing a possible knock-out punch to the industry and its clients.

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 exemption to overtime and minimum wage requirements.

Background: In the Dec. 14, 2014 ruling, the district court judge noted that “Congress’s intent in 1974 to exempt from minimum wage and overtime wage requirements domestic workers providing services, including care to the elderly and disabled, is still as clear today as it was forty years ago,” according to the opinion. “Here, yet again, the Department is trying to do through regulation what must be done through legislation.”

But in the reversal, the appeals court judges agreed with the DOL’s argument that “the 1974 Congress would have wanted the FLSA’s protections to extend to the home care workers of today who are employed by third-party agencies,” according to the ruling. “Home care workers employed by third parties are professional caregivers, often with training or certification, who work for agencies that profit from the employees’ services.”

The DOL’s argument that “the duties of typical home care workers also changed” in that time period also persuaded the appeals court. “In the 1970s, many individuals with significant needs received care in institutional settings rather than in their homes,” the ruling notes. “Since that time, there has been an increased emphasis on the value of providing care in the home and a corresponding shift away from institutional care.”

As the DOL said, “due to significant changes in the home care industry over the last 25 years, workers who today provide in-home care to individuals needing assistance with activities of daily living are performing types of duties and working in situations that were not envisioned when the companionship-services regulations were promulgated,” the appeals court decision notes.

“We were disappointed in the decision by the U.S. Court of Appeals,” says Denise Schrader, chair of the National Association for Home Care & Hospice, one of the plaintiffs in the case. “Left standing the decision will hurt consumers, particularly patients with disabilities and homecare workers, as well as the homecare agencies that both employ and serve them,” Schrader says in a release.

Remember: This rule won’t affect HHAs in the 15 states that already have state laws requiring OT and minimum wage, notes Indianapolis law firm Gilliland, Maguire & Harper. Those states are California, Hawaii, Illinois, Maine, Maryland, Mas-sachusetts, Michigan, Minnesota, Montana, Nevada, New Jersey, New York, Pennsylvania, Washington, and Wisconsin. “This litigation concerning DOL’s Home Care Rule only affects agencies in states in which state law does not require companion or live-in employees to be paid overtime pay,” notes GMH attorney Eileen Maguire.

Plaintiffs Ready Further Legal Action

The Appeals Court handed down its decision Aug. 21, but the rule isn’t in effect yet, Maguire notes. “The District Court must still grant summary judgment to DOL before the Home Care Rule is effective, which it cannot do until 52 days have passed” from Aug. 21, she explains. Thus, the earliest the District Court could issue summary judgment to DOL is Oct. 13 (Oct. 12 is a federal holiday).

But that date will only hold if there are no appeals — and NAHC says it plans to take the case before the U.S. Supreme Court. The trade group and its plaintiff partners will “echo the position” of the district court decision in its arguments before the high court, Schrader says.

“As always, we are taking the side of consumers, those with disabilities who will be most specifically affected and who believe as we do that they will have reduced access to care, and of the workers who are described as benefiting from the Department of Labor rule but who we believe will end up with fewer full time jobs and fewer dollars in their pay envelopes,” Schrader continues in the NAHC member newsletter.

Timeline: It’s very difficult to know when this case will be resolved, Maguire tells Eli. It will depend on factors such as when — and if — the Supreme Court agrees to the review. In the meantime, HHAs will have to decide whether to comply with the new rule.

Note: See the decision at www.cadc.uscourts.gov/internet/opinions.nsf/4F1B05FAF98FCC6E85257EA8004E9BD0/$file/15-5018-1569088.pdf.