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Fair Pay for Home Care Workers Upheld by Federal Appeals Court

August 21, 2015

The U.S. Department of Labor (DOL) acted within its authority when it extended minimum-wage and overtime protections to home care workers, a federal court unanimously ruled on August 21.

“The new regulation is a reasonable exercise of the Department’s authority…and is neither arbitrary nor capricious,” said the decision (pdf), which was written by Judge Sri Srinivasan of the United States Court of Appeals for the District of Columbia Circuit.

The extension of basic wage protections to home care workers will “help to provide a more solid wage floor upon which to improve the quality of jobs for home care aides and quality of care for older people and people living with disabilities,” PHI President Jodi Sturgeon said in a statement. (Sturgeon reiterated this point in a letter to the New York Times published on September 3.)

Advocates for home care workers have long sought these basic wage protections. In 2013, following a lengthy public-comment period, the DOL announced that it would extend the basic labor protections of minimum-wage entitlement and time-and-a-half overtime pay to home care workers, who had previously been excluded from those protections by the federal Fair Labor Standards Act‘s “companionship exemption.”

But a legal challenge filed by the for-profit home care industry prevented the change from taking effect. In December 2014, a federal judge ruled in favor of the home care industry, then issued a temporary injunction blocking implementation of the DOL’s rule change.

The judge went on to vacate the rule change completely in a January decision, which the DOL quickly appealed. The D.C. Circuit Court of Appeals heard the case in May.

Court Rejects Industry’s Arguments

The appeals court rejected the home care industry’s argument that the DOL does not have the authority to institute a rule change extending wage protections to workers. “That argument is foreclosed by the Supreme Court’s decision in Coke,” the court wrote, referring to the 2007 case Long Island Care at Home, Ltd., v. Evelyn Coke, which explicitly said that the DOL does, in fact, have that authority.

Additionally, the court disagreed with the home care industry’s contention that the DOL failed to “provided an adequate justification” for extending wage protections to home care workers.

In fact, the court wrote, the DOL has consistently acknowledged that the role of home care workers has changed significantly in recent decades, rendering the companionship exemption obsolete.

Home care workers, who once “largely played the role of an ‘elder sitter,'” are today “professional caregivers, often with training or certification, who work for agencies that profit from the employees’ services,” the court wrote. They should therefore be afforded the wage protections enjoyed by most other U.S. workers, the court wrote.

The home care industry had also claimed that ensuring fair pay for home care workers would destabilize the workforce by encouraging turnover and lead to more home care consumers moving into long-term care facilities. But the court noted that 15 states already guarantee wage protections for home care workers, and there is “no evidence indicating that extension of protections to home care workers in the relevant states effected an increase in institutionalization or workforce turnover.”

The court approvingly quoted DOL’s predictions that extending wage protections to home care workers would, in fact, stabilize the workforce, reducing turnover and increasing recruitment and retention.

UPDATE: Industry Plans to Appeal

By rule, the court’s decision does not become effective for 52 days. In a statement, the DOL says that it will not begin to enforce the rule change for another 30 days after the decision becomes effective.

On September 1, the U.S. Department of Justice filed a motion (pdf) to shorten the 52-day waiting period because of the “importance of the Final Rule and the significant delay already caused by the lawsuit.” If successful, the DOL has said it still will wait 30 days before it begins enforcement. DOL Secretary Tom Perez sent a letter to state governors (pdf) on September 2 telling them to begin to prepare for implementation.

The home care industry, meanwhile, has announced that it will seek to delay implementation even further by appealing the court’s decision. One of the trade associations that originally filed suit against the DOL, the National Association for Home Care & Hospice, said in an August 25 press release that it plans to appeal the decision to the U.S. Supreme Court.

Additionally, lawyers representing the home care industry filed on September 1 a motion (pdf) to stay implementation of the DOL Final Rule.

— by Matthew Ozga

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