NAHC and Other Advocacy Organizations File Lawsuit Against Department of Labor’s Companionship and Live-in Rules
Legal Action Aims to Protect and Preserve Access to High Quality Home Care Services for Patients and to Maintain Take Home Pay for Home Care Workers
June 18, 2014 10:34 AM
The National Association for Home Care & Hospice (NAHC) recently filed a lawsuit that aims to overturn the new Department of Labor rules restricting the application of the companionship services and live-in exceptions to minimum wage and overtime compensation requirements. Three plaintiffs, the Home Care Association Of America, the International Franchise Association, and the National Association For Home Care & Hospice have filed suit against the U.S. Department Of Labor seeking declaratory and injunctive relief for the Department’s violation of Federal law. 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 limited direct 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 care services will be subject to minimum wage and overtime requirements. Private pay home care impact will vary on a client-specific basis. It is also highly likely that virtually all private pay services will be affected by the new rule.
The revised standards for the exemptions also exclude their application to employees employed by home care agencies (“third-party employers”). The modified “companionship services” exemption along with the live-in domestic services exemption will apply for workers directly employed by the client or a family member. That still causes a negative impact on so-called consumer-directed care because of the new, limited definition of companionship.
The changes to the definition of the Companion Care exemption by the Obama Administration present real challenges for seniors and individuals with disabilities who need access to these necessary personalcare services, as well as the home care workers who serve these vulnerable populations. The rule change will reduce consumer’s care options, increase their costs, and limit the availability of essential caregivers. Workers will be harmed as well, relegated to part-time work even where they prefer full-time employment.
On the changing role of home care providers under the new Companionship definition, Bill Dombi, NAHC’s Vice President for Law, has stated previously that, “workers are going to get the short end of the stick. It will become an industry filled with part-timers.”
The new rule, if enacted, will have a deeply destabilizing impact on the entire home care industry, while creating serious care access problems for the seniors and persons with disabilities along with significant burdens on consumers of care – and on the programs that pay for care such as Medicaid. Mr. Dombi reiterated that the new rule will also hinder both home care clients and workers stating that, “fellowship services are like buying a friend, which is not what home care agencies provide. What most infirm individuals need is not a friend. They need care.”
Given that the new companionship and live-in rules will severely hinder access to home care services, hurt the livelihoods of home care workers, and create cost burdens for already strapped government-funded programs, advocacy organizations such as the National Council on Disability, the National Association of Medicaid Directors, and the Small Business Administration have all asked the Department of Labor to reconsider the new rule and delay its implementation.
Also at issue in the DoL’s new definition is the continuation of the exemption for consumer-employed caregivers – essentially forcing home care patients to become employers with responsibility to take on the myriad of complex tasks that employers face employers such as compliance with tax laws, workers compensation, unemployment compensation, and the Fair Labor standards Act.
“This new definition essentially requires the homebound elderly, infirm, sick, dying and people with severe physical or mental disabilities to become small businesses in and of themselves to get the care they need,” said Mr. Dombi. “Asking someone who is homebound to take on the administrative and bookkeeping tasks that would now be required presents both a barrier and a hindrance to quality home care.”
The lawsuit is filed in the U.S. District Court for the District of Columbia.
To read the full lawsuit, please click here.