In a NAHC Report released today, NAHC provided a very helpful article entitled "NAHC Wins Lawsuit: What Home Care Providers Need to Know Now." The article discusses the implications and next steps following the court's invalidation of the Department of Labor's overtime rule.
We are providing a key excerpt from the article below for your information.
What Does the Decision Mean?
The rulings “vacate” two regulations that the DoL promulgated in an attempt to eliminate any application of minimum wage or overtime exemptions in home care services. The decisions of the court restore the exemptions of “companionship services” and “live-in domestic services” to what had been in place essentially since 1975. That means that personal care services provided in the home by home care agencies are not subject to minimum wage and overtime requirements unless there is a state law providing for such. The decisions block the new rules from taking effect on January 1, 2015. In other words, a home care agency can continue its compensation practices for personal care aides that had been in place in 2014, assuming those practices were compliant then.
What Happens Next?
The DoL through its attorneys have asked the Court to issue a Final Judgment consistent with the rulings. That is a strong signal that DoL wants to prepare the case for an appeal as the rulings issued to date themselves are not appealable. Once the Final Judgment is issued, DoL has 60 days to appeal the case to the U.S. Court of Appeals for the District of Columbia Circuit. The appeals court is one step below the U.S. Supreme Court.
NAHC believes that the chances of an appeal are high given the rarity that federal regulations are invalidated, along with DoL’s publicly expressed dissatisfaction with the court rulings.
The path taken in any appeal can vary widely. If DoL wants to stay (suspend) the district court ruling it must first ask the judge to approve a stay. Judge Leon strongly hinted that he would deny such a request by DoL. If he denies a stay request, DoL can then ask the Court of Appeals to issue an emergency stay. The process in an emergency stay can take mere days or it may extend for months. Generally, it is not a quick process. If a stay is granted, the rules challenged in the lawsuit will go into effect. Since that result is a change in the “status quo,” the Court of Appeals may be disinclined to issue a stay.
Whether or not DoL seeks a stay of the district court rulings, the Court of Appeals will ultimately reach a decision on the merits of the case. The Court of Appeals has the power to review the lower court ruling as a “de novo” matter, meaning it is a fresh and full review not affected by the district court decisions. These reviews now take one to one and a half years typically in DC. If no stay has been issued, the district judges rulings remain in effect, permitting the use and application of the longstanding overtime exemptions.
If the Court of Appeals affirms or reverses the district judge, the next stop is the U.S. Supreme Court. Previously, NAHC successfully litigated issues related to the “companionship exemption” at the Supreme Court in 2005 and 2007.
What Should Home Care Agencies Do?
- An employer’s compensation practices must be consistent with both state and federal law. If you have any question as to whether your state requires overtime for personal care aides, you should consult local legal counsel skilled in employment law. Otherwise, you have many business options to consider, including whether you want to pay overtime even if is not required.
- NAHC believes that advocates for changes in overtime rights will continue the battle at the federal level, but that they will also shift efforts to include state law advocacy. For example, in 2014, California law was changed to establish some rights to overtime for personal care and home care aides. Home care companies should watch for similar efforts in their states.
- Even with the favorable rulings in the lawsuit, it would be prudent for home care companies to evaluate whether their compensation practices are compliant with the FLSA. One area of risk is applying the companionship services exemption to Medicare-type home health aides who may provide health care related services to patients that goes beyond personal care. While DoL has not issued explicit guidance regarding what does and does not constitute “personal care,” the rulemaking challenged in the lawsuit offered hints that the DoL may consider blood pressure testing, wound care, medication administration, and therapeutic exercises to be outside the exemption.
- Follow any emerging developments in the ongoing litigation. A court ruling does not usually give businesses a warning that requirements are changed. A decision of the Court of Appeals would take effect the day it is issued. NAHC will provide its members with up-to-the-minute reports on any such developments through its various media including the listserves, NAHC Report, and its website.