IMPORTANT DECISION AFFECTING OVERTIME PAY TO HOME CARE WORKERS

Effective October 13, 2015, home care workers (home health aides, personal care aides and certified nursing assistants) will be subject to the Fair Labor Standards Act (FLSA) rules, which offer minimum wage and overtime wage protections.  The 1974 Amendments to the FLSA exempted certain categories of “domestic service” workers who provide “companionship services” and who live in the homes where they work for the elderly, ill or disabled.

The FLSA has historically afforded those protections to employees who provide the same services in an institutional setting, not in a home setting. On October 1, 2013, the Department of Labor issued the Home Care Final Rule (Final Rule) to extend minimum wage and overtime protections to home care workers, with an effective date of January 1, 2015. However, on December 22, 2014, the U.S. District Court blocked the Final Rule and ordered a revision of the Rule so as to exempt workers employed by third party agencies (rather than directly by home care recipients and their families). On May 7, 2015, in a U.S. Court of Appeals case known as Home Care Association of America v. Weil, the Department of Labor argued an appeal of the U.S. District Court’s orders.

The question was whether the exemptions from the FLSA are limited to people hired directly by home care recipients and their families, or if they extend to employees of agencies.   On August 21, 2015, the U.S. Court of Appeals issued a unanimous opinion affirming the Final Rule extending protections to home care workers employed by agencies, and reversing the District Court’s orders. The Home Care Association of America asked the U.S. Supreme Court to stay (suspend) the U.S. Court of Appeals ruling. The Association did not want the Final Rule to take effect as they wanted their home care employees to continue to be exempt from the overtime and wage protections.

On October 6, 2015, the Supreme Court refused to stay the ruling, and allowed the Final Rule to take effect on October 13, 2015. The Department of Labor will begin enforcing the Final Rule on November 12, 2015. The FLSA requires employers to pay at least minimum wage and to pay overtime at 150% of normal pay for hours worked beyond 40 hours in a week. As mentioned above, the 1974 Amendments to the FLSA exempted from its protections two types of domestic service workers: companions and live-in aides.

Historically, the Department of Labor applied exemptions from the FLSA to employees of third party providers, such as home care agencies.  In other words, agencies employing home care workers were exempt from the FLSA, so they did not have to pay their home care workers overtime.  In response to the growing need for home care services for people with significant care needs, the Department of Labor adopted regulations reversing the exemptions, thereby giving these home care workers protection under the FLSA. The U.S. Court of Appeals addressed the fact that while many individuals were previously served in institutional settings, elderly and infirm people are increasingly being cared for in their homes. The Court essentially stated that home care agencies can no longer “avail themselves” of the statutory exemption, but rather must pay employees overtime when applicable. This is a controversial decision, to say the least.

Many home care workers now feel that they will no longer be able to live in with their clients because their employers won’t be able to afford to pay them now that overtime will be required. Some home care programs, such as consumer directed programs have a finite pool of funds and may not be able to pay the required time and a half.  Home care agencies, especially those which are funded by government programs and are working within the mandatory managed care requirements, are concerned about the costs, and fear not being able to afford to pay workers.

There is a very real concern that these agencies will be forced to close shop. Moreover, there is a fear that this decision will negatively impact seniors who are more comfortable with having just one live-in aide, rather than multiple aides, which will increasingly be the case due to the overtime requirements. Time will tell how the extension of the FLSA protections to home care workers will affect the home care system.

For information about attorney Ronald Fatoullah and his Elder-Law practice in New York visit the Wellness Village at ParkinsonsResource.org/elder-law/ and click on RONALD A. FATOULLAH. He has been a member of the Wellness Village since its inception in May 2011