Industry groups are applauding the federal judge who struck down the Department of Labor’s new rule that would have extended overtime and minimum wage to home health companion workers employed by third-party businesses in January.
The International Franchise Association (IFA) called the ruling an important step in protecting the industry’s clients, workers and local franchise owners.
“While we are mindful that only part of the DOL’s damaging regulation has been vacated thus far, we are encouraged by the court’s willingness to hold the Administration accountable for misguided policies pursued in defiance of congressional intent and legal precedent,” Robert Cresanti, IFA executive president of government relations and public policy, said in a news release.
“As the court accurately stated, the DOL’s action was, 'a wholesale arrogation of Congress’s authority in this area,' and, 'yet another thinly-veiled effort to do through regulation what could not be done through legislation.'"
IFA, Home Care Associates of America and the National Association for Home Care & Hospice sued the Department of Labor for not only changing the 40-year-old exemption for third-party employers under the Fair Labor Standards Act, but also redefining care.
In order to qualify for the exemption, Maury Baskin, a lawyer with Littler Mendelson, who represented the groups in the case, said care can't be more than 20 percent of a home health companion employee's daily duties.
The Department of Labor has essentially narrowed the exemption down to fellowship, he said. Home health workers for the elderly and disabled can accompany their client, but they can’t help them.
While the groups are pleased with the partial summary judgment, they are hoping the judge will grant a temporary stay, to keep the full extent of the rule from being enforced.
“While a clear victory for the home care community, this decision does not vacate the entire regulation and does not resolve concerns with the Labor Department’s updated definition of companion care,” the Home Care Association of America said in a news release.
The Labor Department said it has 60 days to appeal the ruling, but starting Jan. 1 the revisions to the definition of companionship services will go into effect.
"The district court’s opinion did not address this regulatory provision," the department said in a statement. "Therefore, as of January 1, all employers of home care workers, including third party employers, will be obligated to consider the duties such workers perform in evaluating whether they must pay wages in compliance with the minimum wage and overtime requirements."