This is a follow up to the DOL emails we sent earlier today.  After consideration of the parties’ pleadings, the arguments of counsel and relevant law, and the entire record in this case, plaintiffs’ motion for a partial summary judgment is GRANTED, defendants motion is DENIED, and the Department of Labor’s Third Party Employer regulation scheduled to go into effect on Jan 1, is VACATED.  See below for a summary on the decision.

The United States District Court for the District of Columbia has today issued a partial summary judgment on two pieces of a lawsuit filed by the Home Care Association of America and other plaintiffs related to the Department of Labor’s Home Care Rule. Please note that this information is not legal advice, and is shared after a swift and preliminary review of the decision.

The decision notes that after consideration of the parties’ pleadings, the arguments of counsel and relevant law, and the entire record in this case, plaintiffs’ motion for a partial summary judgment is GRANTED, defendants motion is DENIED and the Departments Third Party Employer regulation scheduled to go into effect on Jan 1, is VACATED.

The largest area implicated by this decision is the third party employer regulation, which withdrew the availability of the companionship and live-in caregiver exemptions from third parties.

Companionship Exemption

As you know, the companionship exemption was impacted in two important ways by the Home Care rule. First, the rule established that the companionship services exemption is not applicable when the employee spends more than 20 percent of his or her workweek performing care services. This portion of the regulation is NOT impacted by this decision, so the companionship exemption is available only when this percentage test is met.

Second, the rule set forth that the companionship exemption is not available to third party employers. This portion of the rule, called the Third Party Employer regulation, is impacted by this court decision by allowing third party employers to avail themselves of the exemption. This means that, for situations meeting the definition of and test for companionship, workers can receive straight pay, not overtime for work over 40 hours/week even when there is a third party employer.

Live in Exemption

Like the Companionship exemption, the DOL rule removed the availability of the live-in caregiver exemption from third party employers. This ruling allows third parties to utilize the exemption, enabling straight pay for live-in caregivers, including for those hours worked over 40.  For details on what constitutes a “live-in” domestic service worker and other conditions of the exemption, see Fact Sheet #79B: Live-In Domestic Service Workers Under the FLSA. http://www.dol.gov/whd/regs/compliance/whdfs79b.htm

While this is decision is important, this case has not been fully decided (there are other counts to be considered by the court) and there will likely be appeals filed, even on this limited judgment.  As a result, states should remain vigilant in their planning and budgeting in the event that, at the conclusion of these legal proceedings, the original rule will be in full force and effect.

NASDDDS will continue to closely monitor developments and keep you apprised.

To read the court’s decision, visit:

https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2014cv0967-21