The U. S. Court of Appeals for the District of Columbia Circuit unanimously upheld a Department of Labor (DOL) rule which extended the Fair Labor Standard Act’s (FLSA) minimum wage and overtime protections to certain home care workers. The rule affects nearly 2 million workers.

When the DOL originally adopted regulations which exempted companionship services and live-in workers, including those employed by third-party providers, from minimum wage and overtime requirements, such professional care typically took place outside the home in institutions. Recently, however, residential care and long-term home care services have grown tremendously and are often provided by third-party agencies, rather than workers hired directly by those requiring care. As a result of the growing and changing industry, the DOL recently adopted regulations reversing its earlier position, and requiring that employees of third-party agencies providing care in a home be subject to the FLSA’s minimum wage and overtime requirements. 

In this case, three associations of home care agencies challenged the DOL’s extension of the FLSA to employees of third-party agencies. The trial court invalidated much of the DOL’s rule, a decision that was overturned on appeal.

The Court of Appeals held that the DOL’s decision to extend the FLSA’s protections to home care workers employed by third-party agencies “is grounded in a reasonable interpretation of the statute and is neither arbitrary nor capricious.” The Court held that the DOL has the authority to “work out the details” of the applicable exemptions, and the “treatment of third-party-employed workers is one such detail.” The Court also held that the DOL’s departure from its past practice was not arbitrary or capricious in light of the changes in the home care industry.

Home care workers employed directly by a person requiring care or their family continue to remain exempt under the FLSA.

Ballard Spahr’s Labor and Employment Group regularly advises clients on employee classification and other matters arising under the FLSA. For more information, contact Timothy F. McCormack at 410.528.5680 or, Constantinos G. Panagopoulos at 202.661.2202 or, Michelle M. McGeogh at 410.528.5661 or, or the member of the Group with whom you work.  

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