We're Not in Fairyland Anymore - Recent Ruling Gives Life to the DOL's Home Care Rule


Like Snow White or Sleeping Beauty (but significantly less beautiful than either one), a recent decision from the D.C. Circuit Court of Appeals has awoken the Department of Labor's (DOL) Home Care Rule from years of peaceful slumber. For years, employees performing home health care, such as certified nursing assistants, home health aides, and personal care aides, were excluded from the Fair Labor Standards Act's minimum wage and overtime pay requirements. That changed in October 2013, when the DOL created the Home Care Rule and declared that third-party employers of home care workers could no longer claim the overtime exemption. In other words, home care and staffing agencies would be required to pay all home care employees minimum wage and overtime pay whenever they work more than 40 hours in a week.

With an effective date of January 1, 2015, businesses waited in fear for the DOL to turn the coach into a pumpkin. However, before the clock struck twelve, a federal district court judge struck down the Home Care Rule. At last, home care employers believed they were safe from the DOL's Home Care Rule (and its stepsisters….or woodsmen….we are getting lost in our own fairy tale metaphors). But it is never over until the evil villain falls from a great height…. Otherwise there is more to the story. As there was here.

On August 21, 2015, the D.C. Circuit Court of Appeals revived the DOL's Home Care Rule, reversing the district court. Thus, unless the U.S. Supreme Court overrules the D.C. Circuit, the Home Care Rule will become effective in the near future. The Home Care Rule's effective date, however, remains unclear. The D.C. Circuit's mandate approving its decision is currently scheduled for October 13, 2015. However, the DOL has requested that the D.C. Circuit expedite the mandate, causing the Home Care Rule to be effective much sooner. Employer groups, on the other hand, have requested that the mandate be stayed pending their appeal to the Supreme Court.

Though the impact of the DOL's Home Care Rule will not be fully known until it is implemented, employers can expect the rule to upend their compensation and business models. In fact, it is estimated that the Home Care Rule will entitle 90 percent of home care employees to minimum wage and overtime pay. Thus, home care employers should evaluate their workforces and payroll practices to ensure that they are in compliance when the Home Care Rule comes into effect. Otherwise, they should be prepared for henchman and misguided princes to pound on their doors demanding payment for unpaid wages.

If you have questions about health law, health care regulatory requirements, FLSA requirements, or other employment issues, please contact, Kerry M. Mohan at (608) 283-2620/kerry.mohan@quarles.com, Sarah E. Coyne at (608) 283-2435/sarah.coyne@quarles.com, Sean Scullen at (414) 277-5421/sean.scullen@quarles.com, Michael Aldana at (414) 277-5151/michael.aldana@quarles.com, or your Quarles & Brady LLP attorney.

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