On June 6, 2014, the National Association for
Home Care & Hospice (“NAHC”), the Home Care Association of American
and the International Franchise Association filed a lawsuit seeking declaratory
and injunctive relief against the Department of Labor seeking to overturn the
new Department rules restricting the application of companionship
services and live-in exceptions to minimum wage and overtime compensation
requirements. The lawsuit was filed in the United States District Court
for the District of Columbia. The new rules are scheduled to take effect
on January 1, 2015.
Under the Department of Labor’s new companionship rule, “companionship services” has been redefined to be limited to “fellowship” “protection” and personal care. Personal care-related services are limited to no more than 20 percent of the hours worked. Under this definition, the vast majority of Medicaid personal services will be subject to minimum wage and overtime requirements. It is highly likely that virtually all private pay home care services will be affected by the new rule.
Under the Department of Labor’s new companionship rule, “companionship services” has been redefined to be limited to “fellowship” “protection” and personal care. Personal care-related services are limited to no more than 20 percent of the hours worked. Under this definition, the vast majority of Medicaid personal services will be subject to minimum wage and overtime requirements. It is highly likely that virtually all private pay home care services will be affected by the new rule.
The revised standards for the exemptions will exclude
application to employees employed by home care agencies (“third-party
employers”). The modified “companionship services” exemption, combined
with the live-in domestic services exemption, will apply to workers directly
employed by a client or family member. According to the lawsuit, the rule
change will reduce consumer’s care options , increase their costs and limit the
availability of essential care workers. Home care workers will be harmed
as well, relegated to part time work even if they seek full-time employment.
The lawsuit asserts that the new rule, if enacted, will
destabilize the entire home care industry while creating serious access to care
problems for the seniors and persons with disabilities. According to the
lawsuit, the DoL’s new definition will essentially force home care
patients to become employers , causing them to take on the myriad of complex
tasks that employers face such as compliance with tax laws, workers
compensation, unemployment compensation and the Fair Labor Standards Act.
In essence, the lawsuit alleges, that the home-bound, elderly,
infirm, sick, dying and people with severe physical or mental
disabilities will be required to become small businesses.
Should you seek additional information on this matter,
please contact Charles MacKelvie at (312) 235-1117 or cmackelvie@kdlegal.com or Meghan Linvill McNab at mmcnab@kdlegal.com or (317) 808-5863.