The question of whether private duty agencies will have to pay overtime to the aides they provide to seniors and the disabled in need of home support services now depends on legal arguments and counter-arguments recently presented to a U.S. district court judge in Washington.
 
In the most recent development, the government, represented by the Justice Department, has offered the court a 41-page response that  contends that the 1974 law extending basic wage and hour protections to “domestic service employees” also granted Labor “broad general authority ... to 'define and delimit’ the scope of  the companionship services."
 
The Justice response is based  to a large extent on a 1984 Supreme Court ruling, which confirmed the right of federal agencies to mandate “reasonable interpretations” of laws enacted by Congress, provided those interpretations aren’t “arbitrary, capricious or manifestly contrary to the statute.” Those reservations don’t apply to the companionship rule, given the lengthy history of the rule making and the more than 26,000 comments Labor considered before issuing the final version a year ago, the Justice memorandum argues.
 
The Home Care Association of America (HCAOA), the International Franchise Association (IFA) and the National Association for Home Care & Hospice (NAHC), filed the lawsuit against the Department of Labor (DOL) for violating the wage-and-hour law when it adopted a rule ending the companionship exemption (HHL 6/16/14).
 
At issue is the final Labor Department rule that will end the long-standing companionship services exemption effective Jan. 1, 2015, and therefore will make an estimated 1.9 million home support workers ineligible for the overtime and minimum wage requirements of federal labor law. The rule specifically prohibits private duty agencies and other third-party employers from claiming the exemption for workers they send to clients’ homes.
 
In their rebuttal memorandum, the plaintiff associations contend there is no precedent for a regulation that would exclude as many as 98% of the employees of third party employers now exempted from the wage-and-hour law. The method by which the Department is proceeding to regulate third party employers also “appears to be “unprecedented in the 76-year history of the Fair Labor Standards Act.”
 
The associations further assert that the Supreme Court case cited by the Justice Department didn’t consider the question raised by the new companionship rule – whether Labor is authorized to issue a rule which bars employers from the statutory exemptions of their employees provided under the “plain language” of the fair labor standards statute.