Department of Labor Announces 6-Month Non-Enforcement of Overtime Rule Changes: “No Real Relief”
October 15, 2014 11:04 AM
The US Department of Labor (DoL) issued a “policy action” on October 9, 2014 that announced a 6-month postponement of any enforcement of the changes to the minimum wage and overtime rules affecting the “companionship services” and “live-in domestic services” exemptions under the Fair Labor Standards Act. DoL also indicated that between July 1, 2015 and December 31, 2015 it would exercise discretion in enforcing the rule changes depending on whether the employer was working towards compliance in good faith.
However, “the Department’s policy Action provides no real relief,” states William A. Dombi, Vice President for Law at the National Association for Home Care & Hospice (NAHC). “The action leaves open the risk that private enforcement will occur since the Department maintains the January 1, 2015 effective date of the rule changes,” he added. The DoL Policy Action only affects direct enforcement of the overtime rules by the Department itself. Private enforcement of overtime rights after January 1 is unaffected.
NAHC notes that private litigants, supported by law firms specializing in class action employment rights lawsuits, have been targeting home care companies to enforce existing overtime compensation rights under federal and state law. The rule changes open a significant additional category of workers who will have minimum wage and overtime rights beginning in 2015. “Home care companies should not be misled by the Department’s action. The delay of governmental enforcement may only be a trap for the unwary, leaving companies exposed to compensation liabilities,” Dombi said. NAHC recommends that home care companies plan to comply with the rule changes by January 1 or adjust business practices to avoid overtime compensation obligations.
The action follows intense efforts by a wide group of stakeholders seeking a rescission of the rule changes or a delay in the effective date. In addition to NAHC and its affiliate, the National Council on Medicaid Home Care, the National Association of Medicaid Directors, National Association of State Units on Aging, National Association of Directors of Developmental Disabilities Services, and states such as Oregon, Kansas, Pennsylvania, and Maryland sought delays or extensions of the effective date. DoL acknowledged that publicly –funded programs such a s Medicaid may need more time to modify their programs to comply with the new rules.
In addition to continuing efforts with Congress and the Department of Labor to delay or alter the rule changes, NAHC continues to prosecute its lawsuit against the Department of Labor, The lawsuit seeks to declare the rule changes invalid and in violation of the Fair Labor Standards Act. NAHC is joined in the lawsuit by other associations representing companies that employ affected workers. The lawsuit is currently awaiting a court ruling. The DoL Policy Action has provided NAHC with the opportunity to inform the court of DoL’s admission that harm will occur if the rules take effect on January 1 and that an expedited ruling is essential.
The DoL action does not affect any state laws and regulations governing worker compensation. A number of states already require overtime to home care workers who may have fit within the federal definition of “companionship services.” Companies operating in such states should continue to comply with those stricter state laws and regulations.
To read the DoL’s policy action, please click here.