Court Rules in Favor of Home Care Association's Challenge to Companionship Exemption

December 23, 2014

U.S. District Court for the District of Columbia Judge Richard Leon issued his opinion (pdf) on December 22 in Home Care Association of America, et al. v. David Weil et al. This lawsuit, brought by several home care provider associations, challenged the authority of the U.S. Department of Labor (DOL) to extend basic minimum wage and overtime protections to home care workers. The rule extending these protections is set to go into effect on January 1.

The new DOL home care rule, which the plaintiffs contested, limits the number of home care workers subject to the "companionship exemption" by: a) narrowing the definition of "companionship" and b) excluding third-party employers from claiming the companionship exemption as well as the exemption of live-in domestic service workers from overtime protections.

The disctrict decision deals only with the treatment of third-party employers, allowing home care agencies and other third-party employers to continue to avoid paying minimum wage and overtime to workers who provide companionship services. However, the decision leaves the narrowed definition of companionship in place.

That narrowed definition limits the application of the exemption to workers who provide fellowship and protection and spend less than 20 percent of their working hours on personal care. Since the work of most home care aides primarily entails providing personal care services, it is expected that valid use of the companionship exemption should be rare, in spite of the district court’s decision.

The ruling will have a more significant impact on employees of home care agencies who live in their clients' homes, because third-party employers will continue to be able to claim the overtime exemption for live-in domestic workers.

PHI and other supporters of the DOL rule decried the ruling and called on private home care employers and state Medicaid programs to move forward with the extension of minimum wage and overtime protections to home care workers as the case moves through the courts.

It is expected that DOL will appeal the decision.

PHI has issued a statement on the court's decision regarding the DOL rule that extends minimum wage and overtime protections to home care workers.

For more information on the DOL home care rule, visit the PHI Campaign for Fair Pay home page and the DOL Home Care website.

-- by Gail MacInnes, PHI Government Affairs Manager

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