Wage Rule Enforcement Begins, Home Care Industry Holds Breath

The Department of Labor could officially begin enforcement of its rule guaranteeing overtime and minimum wage protections for about 2 million home care workers on Friday, but several significant question marks persist when it comes to implementation.

From Nov. 12 to the end of the year, the DOL “will exercise prosecutorial discretion in determining whether to bring enforcement actions, with particular consideration given to the extent to which states and other entities have made good faith efforts to bring their home care programs into compliance,” writes David Weil, administrator of the DOL Wage and Hour Division. But how such enforcement will unfold remains unclear.

Will the DOL be more lenient toward financially strapped state Medicaid programs, which fund the majority of home care services for the elderly, injured and disabled? What strategies will the agency employ to investigate noncompliance? How will company personnel decisions be affected?

These questions, among others, were raised by employer representatives and worker advocates during interviews with Bloomberg BNA earlier this month.

The DOL extended wage and overtime protections to home care workers in 2013, arguing that home care agencies could no longer claim that employees were exempt from the Fair Labor Standards Act. The move was challenged by provider groups, including the National Association for Home Care & Hospice (NAHC), which contended that the change could drive up health care costs and potentially harm employees.

A federal judge subsequently ruled that the DOL didn’t have the authority to make the changes, but the wage and overtime rule was restored in August following a decision from the U.S. Court of Appeals for the District of Columbia Circuit. The U.S. Supreme Court later denied the industry’s application for a stay of that decision, triggering a non-enforcement period that began Oct. 13.

Since then, NAHC has vowed to seek Supreme Court review, but chances of the case being reviewed are hazy.

“From a clearly legal perspective, it’s hard to see the Supreme Court taking up this case and revisiting an issue which it seems had been” settled by a 2007 case, Long Island Care at Home, Ltd. v. Coke, Sarah Leberstein, a senior staff attorney at the National Employment Law Project, told Bloomberg BNA.

In that case, the Supreme Court decided that the DOL has the authority to define FLSA exemptions as they relate to companionship services.

Even NAHC’s vice president for law William Dombi admitted that petitioning the Supreme Court was a long shot.

“The odds of getting a Supreme Court review in any case are very long, so we’re just trying to do the best job we can to improve our odds,” he told Bloomberg BNA.

Exactly how the DOL will proceed with investigating alleged violations in the meantime remains to be seen, though much of the industry believes private providers are in a more vulnerable position in the initial rollout.

“This is taking a health care delivery system that’s been in operation under an exemption for 40 years and trying to change that overnight,” Dombi said. “We would hope the Department of Labor would be patient, and there are definite signs that if a business or Medicaid program is trying to get in compliance, they’re going to be looked at more favorably.”

The Medicaid facet, in particular, stands to reason that leniency will be paid, Abby Marquand, director of policy research at the Paraprofessional Healthcare Institute, told Bloomberg BNA. PHI has focused on ensuring the rule is implemented without harming workers or consumers.

“I’d be surprised if their enforcement strategy is so harsh that it doesn’t allow for the fact that there will be a ramp-up period for states to figure out how to pay for this and how to implement this properly,” she said.

Such a notion has prompted some home care providers to scramble to adjust personnel for compliance purposes. Angelo Spinola, a shareholder at Littler Mendelson in Atlanta, a firm that represents many home health agencies, told Bloomberg BNA that providers already have limited caregivers’ hours.

“Unfortunately, what that means is caregivers are having to go out and find multiple jobs,” he said.

But Marquand said she doubts the rule will shake up the industry in quite the way NAHC and others fear.

“It’s difficult to predict how much of this is based on reality and how much is strategic in terms of delaying this rule,” she said.

Written by Kourtney Liepelt