On Friday, August 21, 2015, the Obama administration’s regulations granting overtime and minimum wage protection to 2,000,000 home care workers were reinstated by the U.S. Court of Appeals for the District of Columbia Circuit. The appellate court concluded that the Labor Department’s regulations were justified by the massive changes in the home care industry that have taken place during the last 4 decades.
Under this rule change, home care workers are entitled under the federal Fair Labor Standards Act (FLSA) to minimum wage and overtime pay when they are employed by a third-party agency. This is a big change because these employees previously fell under the “general companionship” exemption (which is also known as the “live-in domestic service” exemption), and thus were not entitled to minimum wage or overtime pay. That exemption dated back to 1974, when the home care industry was much smaller. As America’s population of elderly grew, so too did the home care agencies. Their political pull in Washington, D.C. enabled them to obstruct a lifting of the live-in domestic service exemption. This, in turn, subjected a generation of home care workers to lives of poverty.
In its decision, the three-judge appellate panel in Washington, D.C. noted that the Department of Labor was within its regulatory authority in issuing a new interpretation of the FLSA, and that in the 4 decades that have elapsed since the exemption was first implemented, there occurred a “dramatic transformation” of the home care industry. In sum, the court held that the new regulatory changes were not only valid, but justified by changing conditions. Wage lawyers for employees have celebrated this long-overdue victory.
The court’s reinstatement of the Obama administration’s regulations will affect approximately two million workers who will no longer be exempt. According to Rapaport and DOL‘s estimates, American laborers will gain hundreds of millions of dollars that they were previously blocked from receiving due to an exemption that long ago ceased serving any legitimate purpose.
The attorneys at Rapaport Law Firm have three decades of experience in New York wage and overtime law. If you believe that you are owed wages, call Marc Rapaport today at (212) 382-1600