On December 23, 2014, Brian Steinbach posted regarding U.S. District Court Judge Richard Leon’s December 22nd decision in Home Care Association of America v. Weil, vacating the portion of the new Department of Labor regulation (proposed 29 CFR Sec. 552.109, scheduled to go into effect on January 1, 2015) barring third party employers from claiming the companionship services (minimum wage and overtime) or live-in domestic service (overtime) exemptions. The post noted that the decision did not address DOL’s separate changes to the definition of “companionship services” (proposed new 29 CFR Sec. 552.6). Those changes included: narrowing to 20% the amount of time that can be spent assisting with “activities of daily living” (such as dressing, grooming, feeding, bathing, toileting and transferring) and “instrumental activities of daily living” (such as meal preparation, driving, light housework, managing finances, assistance with the physical taking of medication, and arranging medical care) that enable a person to live independently at home; and eliminating prior language that allowed the performance of general household work for up to 20 percent of the total weekly hours worked.
However, on December 24, 2014, just two days after Judge Leon’s decision issued, the Plaintiffs in Home Care Association moved to stay the changes in the definition of “companionship services.” In particular, Plaintiffs contended that, as a practical matter, the new rule effectively repealed the statutory exemption by removing the provision of “care” for more than 20 percent of working time from the regulatory definition, despite a forty year history to the contrary. Following a December 31, 2014 hearing, Judge Leon granted a temporary restraining order staying the new “companionship services” definition from going into effect until January 15, 2015. He also set an accelerated briefing schedule for a preliminary injunction, and scheduled a hearing for January 9, 2015. A ruling is likely by January 15, 2015.
Notwithstanding these proceedings, home care agencies must continue to comply with state labor laws in effect. In New York, for example, notwithstanding the temporary stay of the “companionship services” definition, the home care industry must continue to pay minimum wage (now $8.75 per hour) and overtime (at a rate of one and a half times the minimum wage). Should the DOL prevail, the home care industry will be required to increase overtime pay from one and a half times the minimum wage to one and a half times the employee’s regular rate of pay. Though a seemingly minor increase, the home care industry, especially those agencies receiving state and federal funding, are already operating on thin margins and must continue to identify methods of remaining in business without sacrificing the quality of patient care.
The DOL’s revisions to sections 552.102 and 552.110, relating to keeping of actual records of the hours worked by such employees, have not been addressed at this time.