The FLSA has long excluded home care workers from its minimum wage and overtime provisions. This has all changed, however, due to the Department of Labor’s 2013 Home Care Rule. The Home Care Rule went into effect on January 1, 2015 and requires that home care workers employed by third party staffing agencies be paid the minimum wage and overtime.
The Rule was challenged in the District Court for the District of Columbia by a number of trade associations that represent employers of home care workers. In December 2014, the District Court held that the Rule was invalid, finding that the Department of Labor had ignored congressional intent and exceeded its authority in issuing the Rule.
The Department of Labor appealed the District Court’s ruling, and on August 21, 2015, the United States Court of Appeals for the District of Columbia reversed the District Court’s ruling and upheld the Rule. No appeal to the Supreme Court or request for rehearing en banc has been filed.
Due to pending lawsuit and uncertainty regarding whether the Rule would be upheld, the Department of Labor delayed its enforcement of the Rule. However, beginning November 12, 2015, the Department of Labor will begin bringing enforcement actions against entities that are not in compliance—and that have not made a good faith effort to comply—with the Rule.
While the Department of Labor may have delayed enforcement, the Rule has been in effect since January 1, and a number of lawsuits have already begun cropping-up around the country in which home care worker employees are claiming that their employers failed to pay them the minimum wage and/or overtime. These suits are being brought as collective actions under the FLSA and class actions under state laws requiring the payment of the minimum wage and overtime. Due to the class nature of these claims and the fact that the FLSA provides for liquidated damages and attorneys’ fees, these lawsuits carry with them the prospect of significant financial exposure for employers of home care workers.