Co-authored by Gena B. Usenheimer and Jade Wallace
The close of 2014 presented a host of potential problems for home health care providers. As a result of new Department of Labor (“DOL”) regulations changing the federal “companionship” exemption from overtime and minimum wage requirements, many home health care agencies have been bracing themselves for significant changes to their pay practices.
The DOL originally issued its Final Rule on September 17, 2013, which revised the federal regulations defining the FLSA’s companionship exemption. Most notably, the revisions (1) made the exemption available only where the “employer” is the individual, family, or household using the services, thereby making it impossible for third-party agencies to avail themselves of the exemption and (2) changed the definition of “companionship” so as to exclude many home health care aides from the exemption’s coverage.
On December 22, 2014, just ten days before the Final Rule was schedule to take effect, Judge Richard Leon of the U.S. District Court for the District of Columbia vacated the regulation which precluded third-party agencies from relying upon the minimum wage and overtime exemption. Following that order, on December 31, 2014, the Judge issued a temporary restraining order preventing the revised definition of “companionship services” from taking effect until January 15, 2015.
After holding oral argument on the legality of the revised definition, today Judge Leon found the DOL is “yet again … trying to do through regulation what must be done through legislation” and vacated the regulation narrowing the definition of companionship services.
While the DOL will all but certainly appeal these decisions, for now, the FLSA’s companionship exemption remains available to third-party agencies and the definition of “companionship services” is unchanged.