In an opinion issued on January 14, 2015 in Home Care Association of America v. Weil1, the U.S. District Court ruled that the revised companionship service exemption would not take effect and that the exemption would remain as originally promulgated in 1974 (“the Opinion”). This means that home care providers may continue to rely upon the original exemption to allow certain of their employees (primarily home health aides, hospice aides, attendants, private duty caregivers and similar non-skilled employees) to work more than 40 hours in a week without the need to pay overtime.
This ruling is a huge victory for the home care industry as the Department of Labor’s (“DOL”) proposed regulations were extremely narrow and would have ultimately reduced the care provided to eligible patients. This is because eliminating the exemption would have made it impossible for home care companies, who cannot pass overtime costs along to government payers, to pay employees to work beyond 40 hours in a week.
In ruling in favor of the industry, the court determined that, although Congress has given the DOL authority to define the term “companionship services,” the DOL has exceeded the scope of that authority with its latest revisions. The court concluded that the revised definition of companionship services was so narrow that it actually eliminated services from the definition. The court ruled that the definition of the exemption must “include, in a meaningful way, the provision of care.”
The DOL, as it did in the comments to the revised rule, relied heavily on its position that the exemption was meant to apply to elder sitters. The court recognizes that this analogy was in the minds of Congress when it drafted the statute. The court then points out that calling home care workers elder sitters and comparing them to babysitters actually helped make the industry’s case, because babysitters actually provide care. Specifically, the court said:
“Babysitters – good ones at least – do not simply sit and stare at their charges, ready to call for assistance if something should go wrong. And their duties can extend far beyond playing games or making conversation. Babysitters provide care – assistance with activities of daily living and instrumental activities of daily living to the extent the children they are watching are unable to care for themselves. A babysitter, particularly one sitting for an infant or toddler, often is responsible for feeding, bathing, and changing the clothes and diapers of the child. Babysitters regularly prepare food for their children and drive them to places they cannot reach on their own. If the Department believes otherwise, its staff needs to spend some more time with children.” Opinion at 11.
The court also noted that despite making other clarifying changes to the FLSA, Congress had not changed this exemption. The court pointed out that after the Coke2 case, Congress introduced multiple bills that would have specifically amended the exemption but not one of them included provisions that changed the definition of companionship services. This was “persuasive evidence that the interpretation was the one intended by Congress.” Opinion at 12.
This Opinion is important not only because it strikes down an onerous and burdensome regulation but because it recognizes what home care does for its patients and the burden on those patients that the loss of this exemption would present. For now, you can continue to rely upon the companionship services exemption. This is extremely important because many patients were either going to see a reduction in services or have to become used to seeing a number of new, unfamiliar caregivers. Many of your employees will be quite thrilled as it will allow them to continue to work the hours they had been working, which was not the case a month ago.
Although this is extremely good news, please stay tuned, because the DOL can appeal this ruling, and this may only be the first round of protracted litigation.