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Home Care Rule Court Decision: Update 3

01/07/15

Home Care Rule Court Decision (Update)

We have received many questions about the impact of the Federal District Court's decision resulting in a 14-day temporary stay of the entire FLSA Home Care Rule in Home Care Assoc. of America v. Weil. Read on for our analysis of potential impact of this case on your organization and/or program. 

The most recent ruling essentially halts or stays implementation of the entire updated Home Care Rule until at least January 15, 2015. During this time the new Home Care Rule is not in effect. 

Although the Department of Labor had issued a Non-Enforcement Policy for the Rule, the policy only covered DoL enforcement actions. The Court's stay means that absolutely no claims based on the Rule, private or federal, may arise while it is in force (at least until January 15th). 

On or before the 15th, the Court will determine whether or not the stay will continue until the remaining issues in the case are resolved--the most important issue being whether or not the new companionship services definition is lawful. Litigation of the companionship issue will likely take at least several months. 

As most know, the updated duties test in the Rule narrows the companionship exemption to workers who spend no more than 20 percent of their time providing assistance with Activities of Daily Living (ADL) or Instrumental of Activities of Daily Living (IADL) and do not provide any "medically-related services." If upheld, this narrow definition will preclude most employers from claiming the companionship exemption from minimum wage and overtime. 

Earlier in December, the Court ruled that the Home Care Rule's exclusion of third party employers from the provisions of the companionship and live-in worker exemptions was unlawful. In participant direction, we expect this judgment to largely impact third party joint employers of live-in workers because so few workers would qualify for the new companionship exemption. 

For many live-ins and their third party joint employers, the live-in exemption could now be taken, meaning those live-ins could be paid at least minimum wage, but not overtime, for hours worked over 40 in a week. The rules for determining the hours worked for live-ins, including those around sleep time and engaged to wait, are not impacted by this decision because they are not at issue in this case.

It is important to keep in mind that the Department of Labor will likely appeal the Court's decision to allow third party employers to continue to claim the exemptions available to their employees as well as any future adverse decisions issued by the Court. 

In summary: 

  • The entire Home Care Rule is not in effect at least until January 15, 2015. 
  • After that, the entire Home Care Rule might not be in effect while the legality of the companionship "duties test" is litigated. 
  • If the Rule does go back into effect January 15, it will go into effect as written, except that Third Party employers can use the live-in and companionship exemptions if the workers qualify based on residence and duties. 
  • If workers don't qualify for the exemptions, aggregated overtime across consumers for third party employed workers must be paid and travel time between consumers must be paid.

We will keep you updated with any decisions issued by the Court. Please contact us with any questions at: info@participantdirection.org

 

Additional resources for the FLSA Home Care Rule are available on our website