Merrily Orsini's Thought Leadership

Important Companionship Exemption Ruling Affects Home Care

Companionship Exemption exemption allowed for 3rd party employees

The effect on home care by the Companionship Exemption Ruling is great

The home care industry has been actively fighting the Dept of Labor’s administrative ruling that prevented 3rd party employees (employees of agencies) to take advantage of the Companionship Exemption, a law that allows for payment taking into account the nature of the job, where a person is not actually working, but rather may be sleeping, or just “in attendance”. Copied below are two releases sent out last night, one by HCAOA and another by NAHC:

From the Home Care Association of America, “We are pleased to announce the federal U.S. District Court of the District of Columbia decision today in the case of the Home Care Association of America et al v David Weil, et al.  Today’s decision grants the home care community’s motion for partial summary judgment and vacates the U.S. Department of Labor’s efforts to deny third-party employers access to the existing companion care exemption under the Fair Labor Standards Act (FLSA).  The Department’s rule, modifying the FLSA, was set to take effect on January 1, 2015.  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. In his decision, Judge Richard J. Leon states “Undaunted by the Supreme Court’s decision in Coke, and the utter lack of Congressional support to withdraw this exemption, the Department of Labor amazingly decided to try to do administratively what others had failed to achieve in either the Judiciary or the Congress.” Judge Leon further states “The language of the exemption provision is quite clear: ‘any employee’ who is employed to provide companionship services, or who resides in the household in which he or she is employed to perform domestic services, is covered by the exemption.”  HCAOA and the home care community have long held the Labor Department’s regulatory actions in this area were outside the bounds of the law.  Today’s decision provides hope to many who had feared they would no longer be able to afford home care services due to the Labor Department’s overreach. Please stay tuned for further information from HCAOA as we consider further steps and await response from the Department of Labor on this ruling relative to implementation on the remainder of the FLSA rule.

For more information on the decision see the following: http://1.usa.gov/1zOD6wU

From the National Association for Home Care and Hospice, ” NAHC and all of the members of the home care community celebrated today when they learned that the U.S. District Court for the District of Columbia struck down onerous new overtime rules promulgated by the U.S. Department of Labor (DOL).

“What this means is that the rule, which would have taken affect January 1, 2015, will be set aside and that older Americans will once again enjoy access to personal care assistance in their own homes,” said Val J. Halamandaris, President of the National Association for Home Care & Hospice (NAHC), a plaintiff in the lawsuit. “This is a victory for elderly and disabled persons who rely on home care,” said Halamandaris.

The lawsuit challenged a rule that would prohibit the application of two overtime compensation exemptions: companionship services and live-in domestic services. It would have applied whenever caregivers were employed by anyone except the direct consumer of their services-90 percent of care would have been affected by the new overtime rule. This change would have created higher care costs that would have been borne by consumers and financially strapped government funding programs, such as Medicaid.

“This victory proves the value of industry unity,” said President Halamandaris. He commended the International Franchise Association and the Home Care Association of America who worked together with NAHC to file this suit against the U.S. Department of Labor. He also offered special praise for NAHC Vice President for Law, William A. Dombi, who managed and coordinated the litigation effort. “United, fighting on behalf of the elderly and disabled we cannot fail, divided, we cannot succeed,” said Halamandaris.

Halamandaris said that he and other members of the coalition are looking forward to the next phase of the lawsuit which will be designed to fully restore the companionship exemption which has survived in federal law for almost 50 years. A related goal is to make it possible for agencies to once again provide live-in care for those seniors who need it.”

This is a major victory for many home care agencies and those who receive care at home and comes at a time that allows for agencies to continue providing uninterrupted service to those who so need it.

Happy holidays!