Professional Service Agreement

Home Care Rule struck down in Federal Court

December 29, 2014

Department of Labor regulations that would have extended federal overtime and minimum wage pay to home healthcare workers for the elderly and disabled employed by third-party businesses were thrown out by a federal district judge in D.C. on Monday, December 22nd.

The decision sides with the Home Care Associates, the International Franchise Association (IFA) and the National Association for Home Care & Hospice, which argues in its suit against the Department of Labor that the rule which would have eliminated overtime exemptions for companionship services and live-in domestic services would have a "destabilizing impact" on the entire home care industry and adversely affect access to home care services for millions of elderly people.

For over 40 years, third-party business that offer home care services have been exempt from having to pay their employees minimum wage or overtime under the Fair Labor Standards Act. In October 2013, however, the Labor Department issued a new rule that takes away these longstanding exemptions for companionship services and live-in domestic services.

In his opinion, U.S. District Court Judge Richard Leon called the Labor Department's rule change a "thinly-veiled effort to do through regulation what could not be done through legislation."

He cited six bills that were introduced in Congress; three in the House and three in the Senate, over the course of three congressional sessions that extended federal minimum wage and overtime pay to home healthcare workers but never garnered enough support to get to either floor for a vote. The Department of Labor may elect to appeal and it will be interesting to see what develops in the coming days and weeks.

SESCO will provide updates as to the status of the case. If you have specific questions please call us at (423)764-4127 or by email at