Federal Court Stays Effective Date of DOL's Home Care Rule

At the eleventh hour, a District of Columbia federal court today issued a Temporary Restraining Order (TRO) preventing a U.S. Department of Labor (DOL) rule from taking effect on January 1, 2015 that would have drastically narrowed the "companionship services" exemption from overtime under the Fair Labor Standards Act (FLSA).  This order followed the same court's previous ruling on December 22, in which the court struck down another part of the DOL rule that would have prevented third-party employers from availing themselves of the companionship and live-in exemptions at all. 

Littler filed the lawsuit challenging the new rule on behalf of a coalition of associations representing third-party home care providers.  The lawsuit argued that the DOL had exceeded its authority under the FLSA, which specifically exempts companionship and live-in employees from overtime requirements in order to maintain the affordability of home care services to the elderly and infirm.  In issuing today's TRO, the court found that the coalition had demonstrated a likelihood of success on the merits that the Department's newly restrictive "20% care" rule under Section 552.6 will ultimately be found to violate the law   It also found that home care employers would be irreparably harmed by the new rule, that the Department would not be harmed by a stay, and that the public interest supported the stay so that elderly and disabled home care consumers would not be deprived of their current levels of service and affordability. 

Because a TRO can only stay in force for up to 14 days, the court set a hearing for January 9 on the coalition's motion for a Preliminary Injunction. The court indicated it expects to rule on the preliminary injunction at the hearing, but in any event no later than January 14.  Assuming the court grants the preliminary injunction at that time, the exemption from overtime will continue in effect until a final ruling of the Court of Appeals. 

Provided the TRO and/or preliminary injunction remain in effect, home care companies can continue to pay home care aides and personal care attendants without added overtime compensation except where state law requires it. Some minor changes to the DOL rule will take effect on January 1 and are not impacted by the court's December rulings. 

Littler attorneys will conduct a national webinar in the New Year for clients and friends to explain the court's rulings and the companionship and live-in exemptions from overtime.  The webinar will be held on January 12 at 2 pm.  Registration information will be provided shortly.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.