The U.S. Supreme Court has declined to hear Home Care Association of America v. Weil, ending a long-running legal saga and putting to rest any question of whether home care workers will be afforded minimum wage and overtime protections.
At issue is the Fair Labor Standards Act’s so-called companionship exemption. Home care workers were for decades considered “companion” workers and so were exempt from overtime and minimum wage rules that applied to most other domestic workers. This changed when the Department of Labor published a new rule in October 2013.
Home care industry associations pushed back against the new rule in court, winning at the Federal District Court level before the U.S. Court of Appeals for the District of Columbia Circuit affirmed the DOL’s move; the new rule took effect in October 2015, though full enforcement was delayed.
Industry groups took their arguments against the rule to the Supreme Court, arguing in part that extending the overtime and minimum wage protections to the nation’s 2 million home care workers would strap states with new and unaffordable costs. Home care agencies themselves have reported that complying with the rule has put pressure on profits and staffing.
The Supreme Court’s decision may not completely end the fight against the DOL rule extension, but it concludes the legal battle and puts the focus more definitively on how providers and other stakeholders will adapt to the new requirements.
Advocates for the rule have said that it not only is a question of basic justice and fairness to workers, but that paying higher wages could help the home care industry in the long-term, such as by reducing the currently high rates of staff turnover. These advocates applauded the Supreme Court’s decision Monday.
“Home care is difficult work, and has long been undervalued,” stated Jodi M. Sturgeon, president of the Paraprofessional Healthcare Institute (PHI), in a prepared statement issued Monday. “Following today’s decision, we hope that state legislatures will move swiftly to ensure home care providers have the necessary funds to comply with the rule and avoid any disruption of services to consumers.”
Leaders of some home care agencies also are among the rule’s supporters. One of the most high-profile is Karen Kulp, president and CEO of Home Care Associates in Philadelphia. Her agency has been paying overtime and transportation costs since its inception 23 years ago.
“The DOL home care rule has helped even the playing field,” she said Monday afternoon on a call with reporters. “Now, with employers having to pay overtime to all workers, it helps us compete in the marketplace.”
Turning over a staff member costs her company an estimated $2,500 for expenses such as re-training, she said. Paying more competitive wages should help the industry control these costs and ultimately provider higher quality care, she believes.
Kulp and other industry leaders who support the rule are at odds with two of the largest home care provider associations, the National Association for Home Care & Hospice (NAHC) and the Home Care Association of America (HCAOA), which filed the petition for writ of certiorari with the Supreme Court.
The effects of the DOL rule so far have not been positive, NAHC said in a website post following the Supreme Court’s decision.
“Following the institution of the new rules on October 13, 2015, home care companies have adjusted operations through increased use of part time workers, restrictions on work hours to avoid overtime costs, and increased staff recruitment,” the post reads. “However, these are costly changes that do not provide the optimum options for care delivery and management.”
Next Stage for Implementation, Enforcement
The legal battle may be over, but that does not mean that NAHC and HCAOA are conceding quite yet.
“Our efforts to ensure that the elderly and persons with disabilities have full access to home care will continue,” stated Val J. Halamandaris, president of NAHC.
Specifically, the focus now may shift back to Congress, where there is legislation pending to reinstate the companionship exemption. The timeline for these bills is uncertain, however. Their sponsors were awaiting the Supreme Court’s decision before moving forward with the legislative process, and given that the Congressional session is short this year, the bills may not advance until after the elections this fall, NAHC Vice President for Law William A. Dombi told HHCN.
As for implementation and enforcement of the rule, one pressing issue is whether states will increase funding to Medicaid and other programs that reimburse home care. Pennsylvania, New York, California, Massachusetts, Florida, Oregon, and Washington are among the states that have increased budgets in light of the new rule, according to Caitlin Connolly, home care fair pay campaign coordinator with the National Employment Law Project, who also spoke on Monday’s call with reporters.
Other states have not responded with alacrity to the new labor requirements, with Minnesota among the places where caregiver shortages have been reported as a result.
There may also be challenges with implementation and enforcement considering that some home care employees work in relative isolation and they have not been under federal wage and overtime protections in the past, said Connolly’s colleague Sarah Leberstein, senior staff attorney at NELP. There has been some record of violations in states that have had protections on the books already, she noted.
She is optimistic that the new rule will be well-enforced, considering there is a coalition of groups working on it and the DOL itself has been putting forth efforts to “make the rules stick.”
The federal agency recommitted to that effort in the wake of the Supreme Court ruling.
“We have worked closely with a wide range of stakeholders, including state officials, providers of home care services, advocates representing people with disabilities and worker advocates, to encourage thoughtful implementation of the rule,” said Secretary of Labor Thomas E. Perez, in a prepared statement. “We continue to stand ready to provide all stakeholders with the technical assistance necessary to help them comply with the rule.”
Written by Tim Mullaney