Court Issues Temporary Restraining Order
Latest decision overturning the Department of Labor’s new definition of “companionship services” follows NAHC’s previous court victory on DoL’s proposed overtime rules that would have negatively affected access to home care and hospice services
December 31, 2014 01:37 PM
Today, the U.S. District Court for the District of Columbia issued a Temporary Restraining Order (TRO) preventing a U.S. Department of Labor (DOL) rule that redefines the “companionship services” exemption from overtime compensation under the Fair Labor Standards Act from taking effect on January 1. The temporary order follows an earlier ruling by the court on December 22 that restored the rights of home care consumers to benefit from the “companionship services” and “live-in” exemptions regardless of whether the workers are employed by the person receiving the care or a home care company. Both rulings are seen as resounding victories for the home care and hospice community.
“This means that our most vulnerable citizens get at least a temporary reprieve from an increase in the cost of the care they need to stay in their own homes,” said Val J. Halamandaris, President of the National Association for Home Care & Hospice (NAHC), a plaintiff in the lawsuit. “This is a crucial step towards protecting peoples’ rights and access to home care,” continued Mr. Halamandaris.
The lawsuit challenges a rule that would significantly change a longstanding, 40 year-old federal overtime compensation exemption known as the “companionship services” exemption under the Fair Labor Standards Act. That rule would redefine “companionship services” to be primarily “fellowship” and “protection,” allowing for only incidental personal care services before the exemption is lost. The change would have meant that nearly all of current caregivers would be entitled to overtime compensation. This change would create higher care costs that would have been borne by consumers and financially strapped government funding programs, such as Medicaid.
Following the court’s ruling on December 22, NAHC asked the court to stay the effective date of the new definition of “companionship services,” a rule change that was part of the Department of Labor’s effort to severely restrict the overtime exemptions of home care employees. It was necessary to litigate the change in definition after the ruling on which employers are subject to overtime obligations in order to firmly establish legal standing to prosecute the claim.
In its motion for a temporary stay, NAHC argued that home care recipients, companies, employees, and payers of services would face a risk of irreparable harm if the rule went into effect. NAHC also explained that it would be likely that its claims would succeed on the merits and that the public interest would be best served by maintaining the status quo on overtime while the lawsuit proceeds.
The effort for temporary relief was supported with detailed affidavits of likely harm submitted by two disability rights advocacy groups, The Centers for Independent Living and ADAPT along with the Kansas state Department on Aging which is concerned about the financial stability of its home care programs if overtime compensation is required.
The next phase of the case will occur quickly, as the court has scheduled a briefing and a hearing on whether a Preliminary Injunction should be issued. A TRO can be in force for no more than 14 days while a Preliminary Injunction can be in effect until a final ruling on the case.
The hearing is set for January 9. The judge indicated that he may rule on the preliminary injunction at the hearing, but he would rule no later than January 13.
During the time in which the TRO is in effect, home care companies can continue to pay home care aides and personal care attendants without added overtime compensation except where state law requires it.
Home care companies are advised to consult competent counsel to determine if they qualify to use the exemption. If the requested injunction is granted on January 9, the exemption from overtime will continue until the court’s final ruling or the Court of Appeals reverses the injunction. The Department of Labor has previously indicated that it would appeal any adverse ruling of the court.
"Obviously some well intentioned people in the DOL put forth a rule which they said would be good for patients, helpful to homecare employees, and the companies that hire them, and equally good for State/Federal programs such as Medicaid. The fact is that the proposed regulation would have had exactly the opposite effect on every category. For this reason NAHC applauds the US District Court for its rulings and will continue to lead the effort in support of the companionship rules as they have been in effect for more than 40 years, and which have been sustained by a unanimous vote in the U.S. Supreme Court,” said Chairman Devoti.