Supreme Court Denies Stay of New Wage Rules for Home Care Workers

By: Megan J. Muoio, October 19, 2015

On September 19, 2015, three trade groups representing the home care industry filed an emergency application with the Supreme Court, seeking a stay of rules implemented by the Department of Labor (DOL). Those rules require home care workers who are employees of a business or outside provider to be paid minimum wages and overtime pay. Those employees, as well as home care providers hired directly by the person being served or someone on their behalf, had long been exempt from minimum wage or overtime rules. The Fair Labor Standards Act (FLSA) exempted categories of “domestic service workers,” including persons who provide “companionship services” and for persons who live in the home where they work.

The trade groups – the Home Care Association of America, the International Franchise Association, and the National Association for Home Care and Hospice – challenged the DOL’s new rules in the District Court for the District of Columbia. The groups argued that home care workers who care for the elderly and disabled in their homes had been exempt from the minimum wage and overtime pay provisions of the FLSA since it was implemented 77 years ago, regardless of whether they were employed by a business or outside provider or directly by the person being served. Judge Leon of the District Court agreed and vacated the DOL rules. On appeal to the Circuit Court of Appeals for the District of Columbia, the DOL prevailed and the rules were reinstated.

The trade groups argued that, in the absence of a stay from the Supreme Court, the DOL rules would go into effect on October 13, 2015 and would cause industry-wide confusion and irreparable harm. The application for a stay was to prevent implementation of the rules pending the trade groups’ forthcoming petition to the Supreme Court for a full appeal of the merits of Home Care Association of America v. Weil. The trade groups argued that they were likely to prevail on the merits of their petition because the DOL rules were at odds with the Supreme Court’s previous precedent in Long Island Care at Home v. Coke, a 2007 case in which the Court unanimously denied a home care worker’s request to be paid minimum wage and overtime pay. In that case, the Supreme Court deferred to the DOL’s then-current interpretation of the FLSA minimum wage and overtime exemptions for those engaged in “companionship services.”

The trade groups then sought a stay of the implementation of the DOL rules from the Supreme Court. The DOL argued that the home care industry had changed, with people increasingly receiving care in their homes by professionals employed by third-party agencies rather than in institutional settings. In light of the growth and professionalization of the home care industry, the DOL concluded that the exemption should no longer apply and that home care workers who provide care in patients’ home should receive the same wage protections as their counterparts in institutional settings.

On October 13, 2015, Chief Justice John Roberts, without explanation, denied the trade groups’ application for a stay. The denial had the effect of permitting the DOL rules to go into immediate effect. Notwithstanding the setback, the trade groups are expected to file a petition for writ of certiorari shortly, seeking the full Supreme Court’s review of the merits of the DOL’s new rules.


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