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Statement Regarding the U.S. Court of Appeals Ruling in Home Care Association of America v. Weil, by Jodi M. Sturgeon, President, PHI

August 21, 2015

"Today, the U.S. Court of Appeals for the D.C. Circuit affirmed the U.S. Department of Labor (DOL) final Home Care Rule, thereby extending federal labor protections to nearly 2 million home care workers and millions more in the coming decades, given this sector's anticipated growth.

"PHI applauds the court's decision, which makes clear that the DOL has the authority to exclude third-party employers from claiming the 'companionship' exemption to the Fair Labor Standards Act (FLSA). They also affirmed that DOL has the authority to redefine the companionship exemption. The new definition responds to significant changes in the home care industry since the law was amended over four decades ago. Today, the home care industry is composed of nearly 100,000 businesses providing care and support to elders and people living with disabilities: more than 30,000 home health care agencies and more than 67,000 nonmedical agencies delivering personal care services.

"Despite the growth of the industry, the wages of home care aides have declined over the last decade to an average of $9.78 per hour. Federal wage and hour protections 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.

"Everyone — whether we receive care, provide care, or coordinate care for our loved ones — benefit from improving the quality of jobs for America's home care aides. High demand makes home care one of our nation's fastest-growing occupations — but finding skilled, committed workers for caregiving jobs is becoming increasingly difficult.

"Today's decision is a first step to addressing this labor shortage. Home care is challenging work, and has long been undervalued. As the number of people wanting long-term services and supports in their homes continues to climb, we need a multi-faceted national response to transforming long-term services and supports that acknowledges the crucial role of direct-care workers in creating a more equitable and reliable system of care.

"Following today's decision, we hope that the home care industry will cease its efforts to block the Home Care Rule, and instead work with all stakeholders to ensure swift implementation of the rule without disruption of services to consumers."

Background

In Home Care Association of America v. Weil, several home care trade associations and the International Franchise Association challenged the authority of the U.S. Department of Labor (DOL) to redefine the Fair Labor Standards Act companionship exemption. In late December 2014 and early January 2015, in two rulings, Federal District Court Judge Richard Leon ruled in favor of the industry and vacated the DOL's final home care rule, which extended federal labor protections to the vast majority of home care workers.

In 1974, when FLSA was extended to most domestic workers, home care aides were excluded under the companionship exemption, which applied to both teenage babysitters and "companions to the elderly and infirm."

In 2007, the U.S. Supreme Court in Coke v. Long Island Home Care ruled that the exemption was legal, but that the DOL had the authority to redefine companionship services. The Obama administration committed to revising the exemption in 2011 and published the new rule on October 1, 2013. In an unprecedented step, the administration allowed for a 15-month grace period prior to implementation in order to give state Medicaid programs and employers time to assess their programs, make adjustments, and avoid disruption to services for elders and people living with disabilities.

Following today's decision, it is time for state Medicaid programs to move forward with implementation. Further delays will only contribute to increased difficulties in recruiting and retaining workers to meet rising demand.

Home health aides and personal care aides — the two home care occupations tracked by the Bureau of Labor Statistics — will create over one million new jobs over the decade 2012-2022, more than any other occupational grouping. By setting a wage floor and legitimizing the work of millions of women who provide home care services, the new DOL rule is a first step toward strengthening and stabilizing this crucial workforce.

PHI has extensive resources on the home care workforce:

Deane Beebe, Media Relations Director, PHI; dbeebe@phinational.org; 860-434-7719

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