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Home care ruling draws cheers and jeers

January 5, 2015
by Lois A. Bowers, Senior Editor
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A Dec. 22 ruling by the U.S. District Court for the District of Columbia is drawing cheers or jeers from organizations representing home healthcare providers. The court ruled against a U.S. Department of Labor (DOL) provision that, under the Fair Labor Standards Act, would have applied minimum wage and overtime standards to homecare workers hired by private agencies beginning Jan. 1. The case will continue Jan. 9.

Count the Paraprofessional Healthcare Institute (PHI), representing direct care workers, among the disappointed, and the National Association for Home Care & Hospice (NAHC), the International Franchise Association and the Home Care Association of America, representing organizations employing direct care workers, among those celebrating. The latter three associations are the plaintiffs in the case before the court, Home Care Association of America, et al v. David Weil et al, and have questioned the DOL’s authority to change the regulations.

By not limiting the number of home care workers subject to the “companionship exemption,” “the decision…allows home care agencies and other third-party payers to continue to deny minimum wage and overtime compensation to home care workers who provide primarily ‘fellowship and protection’ (as opposed to personal care),” PHI said in a statement. “In addition, all home care workers employed by home care agencies and other third-party payers who provide services on a live-in basis would be exempt from overtime protections.”

Dec. 31, District Court Judge Richard Leon issued a temporary restraining order staying the revised definition of “companionship services” until Jan. 15 to consider the plaintiffs’ motion. The court has scheduled a preliminary injunction hearing for Jan. 9.

The DOL says it stands by the rule, originally announced in late 2013, and is opposing the plaintiffs’ motion. “As we previously stated after the Dec. 22 ruling, the final rule’s extension of minimum wage and overtime protections to most home care workers is the right policy—both for those employees, whose demanding work merits these fundamental wage guarantees, and for recipients of services who deserve a stable and professional workforce allowing them to remain in their homes and communities,” reads a statement on the department’s website.

PHI maintains that “the $90 billion home care industry has seen its revenues double over the last decade, yet home care workers…earn poverty wages, which, when adjusted for inflation, have fallen by five percent over the last decade.” Home care aides have a median wage of $9.61 an hour, PHI says, adding that more than half rely on public benefits to support their families.

NAHC, however, maintains that the court’s decision means that “older Americans will once again enjoy access to personal care assistance in their own homes,” Val J. Halamandaris, president of NAHC, said in a statement. “This is a victory for elderly and disabled persons who rely on home care.”

The new overtime rule would have affected 90 percent of home care, according to the NAHC, which maintains that the change would have created higher care costs for consumers and government programs such as Medicaid.

As the lawsuit continues to proceed through the courts, the plaintiffs will be looking to fully restore the companionship exemption, Halamandaris said. PHI, meanwhile, is calling on private home care employers and state Medicaid programs to extend minimum wage and overtime protections to direct caregivers.

Weil, named in the lawsuit, is administrator of the DOL’s Wage and Hour Division. Other defendants include Thomas Perez, DOL secretary, and the DOL as a whole.