The National Association For Home Care And Hospice And Two Other Advocacy Organizations File A Lawsuit Contesting The Department Of Labor’s Companionship And Live–In Rules

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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.

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 or Meghan Linvill McNab at or (317) 808-5863.