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Federal Judge: Home Care Workers Entitled to Minimum Wage and Overtime

Thursday, August 27th, 2015

Kenneth QuinnellIn a unanimous decision, a federal appeals court reversed a district court and ruled that the U.S. Department of Labor was within its authority to issue a rule change meant to provide home care workers with a minimum wage and overtime protections. The case is now remanded to the district court.

In 2013, the Labor Department announced rule changes under the Fair Labor Standards Act (FLSA) that would guarantee that workers who care for the elderly and people with disabilities in their homes would have the same labor protections as other workers. But U.S. District Judge Richard Leon halted the change saying that Labor didn’t have the authority to make the rule change. On appeal, the higher court disagreed. U.S. Circuit Judge Sri Srinivasan wrote for the court: “The Department’s decision to extend the FLSA’s protections to those employees is grounded in a reasonable interpretation of the statute and is neither arbitrary nor capricious.”

Christine L. Owens, executive director of the National Employment Law Project, said she assumes that Labor now has the authority to implement the changes: “States would be well advised, and employers would be well advised, to take this decision as final and begin acting.”

As Think Progress reports:

This workforce, which is 90 percent female and half people of color, hasn’t been eligible for minimum wage or overtime pay since 1974, when they fell under the companionship exemption given the idea that they merely provided company to their clients. So while their average wages come to $9.61 an hournearly a third of those surveyed in New York City made less than $15,000 a year and nearly 40 percent of the entire workforce has to rely on public benefits to get by….

Home care workers are in a huge and rapidly expanding industry. Nearly 2.5 million people are employed in this line of work, making it one of the largest occupations, and the number of jobs is expected to grow 70 percent by 2020. Even so, demand is expected to outpace supply over the next decade as the country ages, something that could be eased with higher pay and benefits.

This post originally appeared in AFL-CIO on August 26, 2015. Reprinted with permission.

About the Author: Kenneth Quinnell is a long-time blogger, campaign staffer and political activist.  Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars.  Previous experience includes Communications Director for the Darcy Burner for Congress Campaign and New Media Director for the Kendrick Meek for Senate Campaign, founding and serving as the primary author for the influential state blog Florida Progressive Coalition and more than 10 years as a college instructor teaching political science and American History.  His writings have also appeared on Daily Kos, Alternet, the Guardian Online, Media Matters for America, Think Progress, Campaign for America’s Future and elsewhere.

2015 Will Usher In Increased FLSA Liability for Home Health Care Agencies

Wednesday, September 25th, 2013

Patrick J. FazziniOn Tuesday, September 17, 2013, the U.S. Department of Labor (DOL) issued a final rule extending the Fair Labor Standard Act’s (FLSA) minimum wage and overtime protections to an estimated two million home health care workers. Scheduled to take effect on January 1, 2015, this amendment narrows the FLSA’s “companionship” exemption.

In 1974, Congress extended the FLSA’s wage protection provisions to virtually all domestic service workers; however, it provided a limited exception for workers who provided for the care, fellowship, and protection of persons who, because of advanced age or physical or mental infirmity, could not care for themselves. These “companionship” services, which are widely and popularly used for the in-home care of loved ones, most often include assistance with household work such as meal preparation, bed making, clothes washing and other similar personal services.

U.S. Secretary of Labor Thomas E. Perez recently summarized these types of services, stating, “Many American families rely on the vital services provided by direct care workers. Because of their hard work, countless Americans are able to live independently, go to work and participate more fully in their communities.”

The DOL points out that the home health care industry has grown significantly over the last 35 years and that the in-home care services provided to individuals today are markedly different from when the companionship services regulations were first promulgated. As a result, and in an effort to extend the FLSA’s protection to this ever-growing in-home workforce, the final rule removes the ability of third-party employers to avail themselves of the companionship exemption. However, it does permit the individual, family or household employer directly employing the worker to continue to take advantage of the exemption—so long as the employee still primarily provides the fellowship and protection contemplated by the exemption. Further, and among other amendments, the final rule explains that direct care workers who perform medically-related services for which training typically is a prerequisite, are not companionship workers and therefore are entitled to the minimum wage and overtime pay.

As a result of the final rule, many third-party employers—specifically home health care agencies—should be on the lookout for potential FLSA liability stemming from improper exemption classification and compensation issues. Why the delayed start date? The DOL indicates that the January 1, 2015 start date is intended to give employers “time to adjust” and as such, employers should begin conducting internal FLSA audits to ensure their continued legal compliance when the transition takes effect.

This article was originally printed on Ogletree Deakins’ Wage and Hour Blog on September 20, 2013.  Reprinted with permission.

About the Author: Patrick Fazzini is an associate in the Pittsburgh office of Ogletree Deakins.

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