FLSA Decision: Court Rules In Favor of USDOL

On Friday morning, the United States Court of Appeals for the District of Columbia upheld the federal Department of Labor’s revisions to the “companionship exemption” under the Federal Labor Standards Act. Home Care Association of America v. Weil, (D.C. Circuit, Aug. 21, 1015). Those revisions remove the companionship exemption from federal minimum wage and overtime requirements for domestic workers employed by third-parties. In addition, those revisions greatly narrow the definition of “companionship services.”

The federal Department of Labor in 2013 had significantly revised its FLSA regulations regarding the “companionship exemption.” 78 Fed. Reg. 60,454 (Oct. 1, 2013). As revised, third-party employers can no longer claim that their workers are exempt from federal minimum wage and overtime rules, even if the workers are providing companionship services. 29 CFR § 552.109. In addition, the rule greatly narrowed the definition of “companionship services,” so that if the worker is spending more than twenty percent of the worker’s time on the “provision of care,” the worker is deemed not to be providing “companionship services,” whether the worker is directly employed by the family or by a third party employer. 29 CFR § 552.6(b). “Provision of care” means assistance with the activities of daily living and instrumental activities of daily living. 29 CFR § 552.6(b).

The Home Care Association of America challenged the revised regulation in federal court, contending that the Department of Labor had exceeded its authority in adopting the revised regulation. The District Court agreed, and invalidated the regulation. In doing so, the District Court enjoined the Department of Labor from enforcing the regulation. The Department of Labor appealed. The D.C. Circuit reversed the District Court, upholding the regulation in full.

Although the D.C. Circuit has reversed, it also effectively stayed the effect of its decision, granting the challengers seven days to file a petition with the Court for rehearing or a petition for rehearing by the full D.C. Circuit. For the short term, at least, the revised regulation is not in effect, and will not be until the D.C. Circuit takes further action.

If the regulation goes into effect, it will have significant impact upon home care agencies and the consumer directed personal assistance program.

For details on how the ruling will impact home care agencies and consumer directed personal assistance, please log into the members area of the website and click here.


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