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Breaking News: Federal Judge Overturns Rule on Home Care Overtime Exemption

January 14, 2015

U.S. District Court Judge Richard Leon has ruled that the U.S. Department of Labor will not be allowed to enforce it’s new rule that would force home care companies to pay overtime.  In his ruling, the Judge saidUS District Court that the change would have to be implemented through the Legislative process in Congress rather than the regulatory process in the Department of Labor.

Considered a major victory by home care trade associations, the ruling in the case Home Care Association of America v. David Weil strikes down new overtime rules promulgated by the U.S. Department of Labor (DOL) that would have taken effect January 1, 2015.

Specifically, the court sided with plaintiffs including the Home Care Association of America, the National Association for Home Care & Hospice (NAHC) and the International Franchise Association, which challenged a rule that would prohibit the application of two overtime compensation exemptions: companionship services and live-in domestic services.

In other words, the court’s decision allows home care agencies and other third-party payers to continue denying minimum wage and overtime pay to home care workers who provide “fellowship and protection” as opposed to personal care.

It also exempted workers employed by home care agencies and other third-party payers who provide services on a live-in basis.

This is the third victory in this lawsuit for home care interests within the last month. On December 22, the court ruled that patients are entitled to equal rights regardless of whether they or their families paid their home care bills or they were paid by the joint, federal-state health insurance program, known as Medicaid. On December 31, the court ruled for the plaintiffs by agreeing to issue a Temporary Restraining Order (TRO) blocking the DOL from enforcing new rules related to “companionship” and “live-in” care. On January 9, the court, in considering a motion from Plaintiff attorneys for an injunction to block enforcement of residual parts of these rules through this date or a trial, stated that so much evidence was in the record there would be no need for a trial. The judge therefore agreed to give his decision on the case on or by January 14, when the TRO was set to expire. Today, the judge ruled for the Plaintiffs and home care interests, saying the proposed new DOL rules violated the law.

There is no word yet on whether the Department of Labor will appeal the Judge’s ruling to the U.S. Court of Appeals.

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