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As the U.S. Supreme Court goes into its summer recess, home healthcare workers can rest easy knowing they are entitled to higher wages and overtime pay.home care rule

With only a few days left in the term, the Supreme Court declined to hear a case that challenged a Department of Labor (DOL) home care rule that requires higher wages for millions of home healthcare workers. In other words, the ruling still stands.

Minimum Wages and Overtime Pay

The case, Home Care Association of America, et al. v. Weil, focused on whether it should be mandatory for third-party employers to pay minimum wages and overtime pay. While home healthcare workers and employee advocates defended this rule, the industry feared that it would raise the cost of patient care.

However, Sarah Leberstein from the National Employment Law Project defended her view saying that, “stabilizing worker income and improving standards will ease the tremendous burnout and turnover” that negatively affects the home healthcare industry and patients[i].

History of the Home Care Rule

For decades, millions of home healthcare workers have been excluded from the Fair Labor Standards Act (FLSA) due to the “companionship” exemption.

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Under this exemption, anyone who employs a worker who provides companionship services to a person with illness, injury or disability are not required to meet the FLSA’s minimum wage and overtime pay provisions.

This has been a source of debate for years, as workers who perform the similar duties in nursing homes have always had access to FLSA protections.

Home Care Rule

In 2013, the DOL enacted a home care rule to narrow what this “companionship exemption” included and determined that the exemption could only apply to consumers (an individual, family or household) who employed a companion worker. The exemption could not be used by third-party employers.

Then, at the end of 2014, a federal district court decision deemed the home care rule an improper exercise of the Department of Labor’s authority. Then, in the summer of 2015, the U.S. Circuit Court of Appeals reversed this decision.

Since the Supreme Court decided not to review the case this year, the lower court’s ruling stays in place, and therefore, the home care rule remains.

What this Means for Employers

Some predict that the decision to leave the lower court’s decision in place will lead to a more stable home healthcare workforce and increase care by reducing turnover.[ii] However, employers worry about keeping costs down and care affordable.

Managing overtime will be essential to help employers keep labor costs within budget. Leveraging a robust human capital management system can help.  A system that accurately calculates work time and alerts you when someone is reaching 40 hours, can help curb unplanned overtime and ensure you are in compliance with the law.

Want to learn how EPAY can help? Contact us.