Recently, the U.S. Court of Appeals for the District of Columbia Circuit reinstated regulations that will allow for more than two million home healthcare workers to qualify for minimum wage and overtime protection. The Department of Labor (DOL) had previously used its rule-making authority to extend the FLSA’s minimum wage and overtime requirements to home healthcare workers, who had previously been exempt under the “companionship exemption.” Employers in the industry challenged the DOL’s rule as being inconsistent with Congress’ intent. The Court of Appeals for the DC Circuit found the rule to be valid. “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,” Judge Sri Srinivasan wrote for the court.

In extending the FLSA’s protections to home healthcare workers, Judge Sri Srinivasan cited a “dramatic transformation” of the home healthcare industry over the past four decades. She noted that while most caregivers used to be directly employed by individual households, the vast majority of workers nowadays work for staffing companies that service hundreds or thousands of customers. More home healthcare workers are performing duties that require more skill than just basic meal preparation, bed making, clothes washing and “companionship.”

The ruling may be problematic for employers in the industry who will now have to accurately record hours and ensure their employees receive overtime for hours more than 40. Home healthcare agencies and other opponents say that the rule will make it tougher for families to afford home care for aging parents and result in more elderly people being institutionalized. For the $84 billion industry, lobbyists argue that the new rule could even reduce the take-home pay of home healthcare workers if their employers decide not to send its employees out for shifts longer than eight hours in order to avoid paying them overtime.

At this time it is uncertain whether the Court of Appeals’ decision will be appealed to the Supreme Court. Additionally, the effective date of the validated rule has not been conclusively determined. What is clear is that it is important for employers of home healthcare workers to start taking the appropriate steps now, if they have not already done so, to ensure they are in compliance with all applicable minimum wage, overtime and record-keeping requirements for their home healthcare workers.