Judge Delays Effective Date for DOL Rule To Boost Home Worker Pay

A federal judge has delayed until Jan. 15 the effective date of part of a Department of Labor rule that will extend minimum wage and overtime pay protections to more home care workers, Modern Healthcare reports.

Background

Home care "companions" who provide "fellowship, care and protection" for elderly or disabled individuals have been exempt from overtime pay and minimum wage requirements.

Part of the DOL rule narrows the definition of companions to individuals who spend 20% or less of their time providing care (Schencker, Modern Healthcare, 1/5). As a result, many home care workers no longer will be exempt under the new rule and will be required to receive at least the federal minimum wage, which is $7.25 per hour, and receive overtime pay.

The rule was set to take effect on Jan. 1, although DOL announced in October 2014 that it would not begin enforcing the rule until June 30.

California Department of Finance spokesperson H.D. Palmer said the federal announcement to delay the enforcement of the rule would "have no effect on [California] unless they change the effective date." He said the state in January 2015 will begin paying home care workers for overtime (California Healthline, 10/9/14).

Three home care industry groups -- the Home Care Association of America, the National Association for Home Care and the International Franchise Association -- sued the federal government over the rule in June 2014. They argued that the rule would destabilize the home care industry and result in reduced access to affordable and quality care for the elderly.

In December 2014, U.S. District Court Judge Richard Leon ruled against a separate part of the rule, which would have required companions employed by third-parties, including home care companies, to be extended minimum wage and overtime pay protections.

Details of the Delay

The associations also filed a motion for a temporary stay of the rule's companion definition, arguing that allowing it to take effect on Jan. 1 would result in "significant disruption of the home care industry and irreparable harm to employers, consumers, state government and employees." They also said that the new definition would result in no minimum wage and overtime pay exemptions for "an overwhelming percentage of workers in the home care industry."

They added that "Congress enacted the companionship exemption in order (to) keep home-care costs as affordable as possible for the elderly and infirm and their families and to avoid institutionalization." Further, they said that although DOL had delayed the rule's enforcement date, an effective date of Jan. 1 would still expose home care companies to "private litigation, confusion and unrecoverable costs."

Next Steps

The home care associations are pushing for a further delay of the companion definition change to provide time for the courts to rule on the definition's legality. A federal judge on Friday is set to hear arguments regarding whether to issue a preliminary injunction against the rule and has said he expects to issue a decision on an injunction shortly thereafter, according to HCOA (Modern Healthcare, 1/5).