Until recently, the U.S. Department of Labor (DOL) had long interpreted the federal Fair Labor Standards Act (FLSA) as exempting companionship-services workers and live-in domestic service workers employed by third-party employers (i.e., “home care agencies”) from the FLSA’s minimum wage and/or overtime requirements. In 2013, however, the DOL adopted regulations reversing that established position, finding that the FLSA’s minimum wage and overtime requirements protect home care agency workers and sending shockwaves throughout an entire industry.

This led to several home health care associations challenging the DOL’s regulations as inconsistent with both the actual language of the FLSA and congressional intent.  While the trial court agreed with home health care associations and struck down the regulations, the U.S. Court of Appeals for the D.C. Circuit on August 21, 2015 reversed and granted summary judgment for the DOL in Home Care Association et al. v. David Weil et al., finding the agency’s decision to reverse the long-standing exemption to be “grounded in a  reasonable interpretation of the [FLSA]” and “neither arbitrary nor capricious.”

Home care agencies will now be obligated to pay employees 1.5 times their regular rate of pay for all hours worked over 40 in a workweek, although the effective date of the new regulations is still to be determined.  Employers operating in states with their own laws extending some degree of overtime protection to domestic workers, including New York and California, must now be mindful of and comply with federal law as well so that the home care agency workers receive the greatest coverage and protections possible.

Goldberg Segalla’s Employment & Labor Practice Group will continue to monitor the new regulations’ impact on the home care agency industry, as well as any potential appeal to the U.S. Supreme Court.

For more information on how this may impact your business, please contact:

• Michael S. Katzen (609.986.1319; mkatzen@goldbergsegalla.com)
• Caroline J. Berdzik (609.986.1314; cberdzik@goldbergsegalla.com)
• Or another member of the Goldberg Segalla Employment and Labor Practice Group.