I have followed this saga for some time and believed that the Court would not side with the USDOL on this matter. I was wrong. The Court of Appeals for the District of Columbia has just held that the USDOL’s decision to make home care workers eligible for overtime is a reasonable interpretation of the law. In so doing, the Court reversed the district court. The case is entitled Home Care Association et al. v. David Weil et al.
The Court held it appropriate that the DOL rule should give home care workers the same FLSA protections given to workers who provide “most of the same services in an institutional setting” and held that the agency’s “decision to extend the FLSA’s protections to those employees is grounded in a reasonable interpretation of the statute and is neither arbitrary nor capricious.”
The new rule revises the companionship services definition and specifies that the overtime exemptions previously allowed for companionship services and live-in domestic service will only apply to individuals or families and not to companies or employers (e.g. home health care agencies) that send homecare workers into the homes of their clients. The rule brings overtime eligibility to two million new workers.
The Second Circuit agreed with the DOL position, where the agency contended that the US Supreme Court’s 2007 decision in Long Island Care at Home Ltd. v Coke precluded the plaintiff’s attack that the DOL did not have the authority to issue its amended third-party employment regulation. The Court stated that “[Coke] confirms that the act vests the department with discretion to apply … or not to apply … the companionship-services and live-in exemptions to employees of third-party agencies.”
When the law suddenly turns against the employer, it must ascertain how to maintain compliance with the new legal landscape at the same time maintaining efficient operations and making a profit. Put differently, the fundamental issue is how to meld legal dictates with operational needs.
With an issue like this, it may not be easy. The “easy” solution is to limit these workers to no more than forty per week, so overtime never becomes an issue. This may not be operationally feasible, or simply by the nature of the employment, the workers will invariably work more than forty hours. Lowering wage rates to account for the overtime is another option but this creates serious employee relations problems and if the employees are making close to the minimum, how far down can wages be cut?
Maybe the answer is to, somehow, and legally, build in the overtime, if the workers will usually/always work the same hours every week.