D.C. Circuit Revives U.S. DOL’s Final Rule on Home Care

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On August 21, 2015, the U.S. Court of Appeals for the District of Columbia Circuit held that the U.S. Department of Labor’s Home Care Final Rule, which eliminates the companionship and live-in domestic service exemptions for “third-party providers” of home care services, was a valid exercise of the Department’s regulatory rule-making authority. As a result, home health providers must now ensure that their aides receive at least minimum wage and overtime at 1.5 times their “regular rate of pay” for all hours worked over 40 in a workweek.

The D.C. Circuit reversed the lower court’s decision which held that the Department’s Final Rule was contrary to the plain terms of the Fair Labor Standards Act. The lower court had determined that Congress intended the companionship and live-in domestic service exemptions to be available to third-party providers of home care services. The D.C. Circuit flatly rejected this determination, finding that it was foreclosed by the Supreme Court’s decision in Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158 (2007). According to the D.C. Circuit, Coke vested the Department of Labor with the discretion to apply (or not to apply) the companionship-services and live-in exemptions to employees of third-party agencies.

Thus, home care agencies can no longer rely upon the companionship or live-in domestic service exemptions. And the Department of Labor has taken the position that the D.C. Circuit’s decision renders the Final Rule effective immediately, as the Department has published an update on its website stating that home care workers “now qualify” for minimum wage and overtime protections. So, absent further action from the Department or courts, all aides employed by home care agencies must be paid minimum wage and overtime at 1.5 times their regular rate for all hours worked over 40 in a workweek.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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